Superficial Drill Down on Long Term Liabilities Sheet Four

Superficial drill down on long term liabilities sheet four:

• When the bond’s yield requires a discount, the bond’s interest expense is based  on a lower principal and expense applying straight-line would be higher. 
• For a troubled debt restructuring involving only a modification of terms total future cash payments would be compared to the carrying amount of the debt to determine if the debtor should report a gain on restructuring
• A liquidated debt is a debt for an amount to which both parties agree. Payment of a lesser amount does not discharge the balance.
• Effective interest = Carrying value of the bonds × Effective interest rate × Time period
• ​Current liabilities also include long-term obligations that are or will be callable by creditors because the debtor has violated a covenant in the debt agreement. 
• Premium amortization is the difference between the cash payment and the interest expense. The premium amortization is subtracted from the carrying value because the bonds were issued at a premium and will approach face value

cc: Reporting