Purchasing bonds at a higher value?

Question

Suppose I purchase $600,000 of 6% bonds of Company X, Inc., for 105 on Feb. 23...
How would I record the extra 5% paid for the bonds in an accounting journal?

Like this?:
Bond investment 600,000 Debit
????? 50,000 Debit
Cash 650,000 Credit

If so, what is the "?????" to be called? paid-in-capital... in excess of what? And do I include the 5% for interest payments?

OR like this?:
Bond investment 650,000 Debit
Cash 650,000 Credit

PS...excuse the Y! Answers formatting.

Answer 1

Bonds are a crazy animanl. In your example your purchasing bonds at a premium price here is my example Par is alaway 1000

1001 +
stock price--Nominal Yield-- Current Yield---Yield to Call--Yield to
^ Maturity
999 -

Think of it like a see saw. Now to answer your question Bonds Purchased at a premium you will amortize a set $ per year to figure out total amortization multiply your amortized amount x years hold the bond

Amortized amount = par(1000)-Puchase Price/ Years to Maturity

As you amortize you will be decreasing the amortized amount from the original cost then to figure our gains and/loss just subtract the adjusted cost from the original sales price. Each year you amortize you must report this to the IRS.

Answer 2

Your second guess is more like it. You need not have to show the premium paid other than in foot notes or end notes. Put an asterix and show it down.

Answer 3

actual, even nonetheless the fee isn't economic, yet usually emotional. you're able to be able to get married for romance or for money. an comparable for having intercourse. the two are for some component in return, so the two are a "fee" - it incredibly is merely that one is considered extra suitable in society suitable now than different.

Answer 4

well any time some one buys stock, he cant get people around him to want that stuff anymore,
so only one person is left who can buy stock and gain money,

thats why people get ideas that arent theirs for eveyone to use