Bond Premiums and Discounts The amortizes premium or discount in equal amounts each period during the life of the bonds. The effective interest method of amortization is based on the effective rate of interest and the 1 TL Bond Premiums and Discounts being the excess of the face value over the selling price If bonds are sold below their face value, they are issued at a discount amount of the discount Bonds sold above par are issued at a premium the excess of the selling price over the face value Contingencies Which of the following are included in the definition of a contingency? I. Existing condition. II. Ability to identify the recipient before the time of settlement. III. Resolved when a future event occurs or fails to occur. a. I and II only. Ob. I and III only. c. II and III only. d. I, II, and III. Current Liabilities Declared but unpaid cash dividends are reported as on a company's balance sheet if the company expects to distribute the cash dividend within the following year. Stock dividends (dividends payable in shares of stock) are because they do not require a distribution of assets. Instead, they require a distribution of a company's and are reported as an element of