Why is the carrying amount not calculated as 2 mn x 96/100 – 39000?
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there is a basic assumption that bonds are issued at 100 par. If you want to confirm that your can re-check the same with the un amortized discount present in the books.
Always carrying amt in the books are shown on par value is 100 & not on 96.
so the carrying amt of the bond is 2000,000 only
It’s all depends on the company choice of presentation if company want to disclose the fair value of debt then they have to follow Pull-to- Par effect to value the debt in that case 2 component are debited to income statement first coupon amt and increase in debt due to pull- to- par effect.
But if company choose to disclose at historical cost in that case the amt of discount or premium write-off through straight line method over life of the debt.
But in this question no such info. is given so we have to do it direct.
I hope this will help.