Amortization of bond discount

The process of systematic allocation of the amount of discount allowed on bonds (Bonds payable) over the life of bonds. The issuance of bonds on less than their face value is discount on bonds and the issuance of bonds on the value higher than their face value is premium. The amount of amortization of discount on bonds is debited in interest expenses of bonds account. Some companies amortize the discount on bonds to reflect the true interest expenses on bonds