##### Asked by: Rubel Cunchillos

asked in category: General Last Updated: 7th June, 2020# How do you calculate unamortized discount?

**unamortized**bond premium and add it to the face value. Then multiply the result by the yield to maturity, and subtract it from the actual interest paid. For the first year, the

**unamortized**bond premium is $80, so you would multiply $1,080 by 5% to get $54.

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Hereof, what is an unamortized discount?

**Unamortized** Bond **Discount** Defined A par of a bond is the bond's value at maturity. A bond **discount** is a bond's excess of par value over its selling price. An **unamortized** bond **discount** refers to the balance of a bond **discount** that remains to be amortized by the issuing firm over the bond's life until it matures.

Secondly, what type of account is unamortized bond discount? unamortized bond discount definition. A contra **liability** account containing the amount of discount on bonds payable that has not yet been amortized to interest expense.

Similarly one may ask, how is unamortized premium calculated?

**Calculating** the **Unamortized** Bond **Premium** Multiplying the selling price of the bond by the YTM yields $1,090 x 4% = $43.60. This value when subtracted from the coupon amount (5% coupon rate x $1,000 par value = $50) results in $50 - $43.60 = $6.40, which is the amortizable amount.

What type of account is bond premium?

A **liability** account with a credit balance associated with bonds payable that were issued at more than the face value or maturity value of the bonds. The premium on bonds payable is amortized to interest expense over the life of the bonds and results in a reduction of interest expense.