Premium on Bonds Payable

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Premium on Bonds Payable is the account used when bonds are issued above face value; it indicates that market interest rate is below contract rate. This account is a liability account.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Premium on Bonds Payable. Account used when bonds are issued above face value; it indicates that market interest rate is below contract rate. This account is a liability account.

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