How to Record an Accrued Bond Interest Expense on a Balance Sheet

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Recording an accrued bond interest expense on a balance sheet is done differently whether the bond was purchased at face value, less than face value or at a premium. Understand how to record various bond interest scenarios with information from an accounting professor in this free video on business.

Part of the Video Series: Balance Sheets
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Video Transcript

Hi, my name is Shawn Jones, adjunct professor at Argosy University. Today, we're going to discuss how to record the bond interest expense on the balance sheet. That is, what happens when an investor purchases a bond issued by the company if that bond is purchased at face value, if it is purchased at less than face value, or if it is purchased at a premium, which is above face value. In each of those three scenarios, the interest or the accrued interest -- the liability that is owed by the company to the investor -- is recorded in a different manner. For more information about this topic, please visit our website at argosy.edu. There you can find our phone number or an address to come and visit our Salt Lake City campus.

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