Amortization of bond premium

The process of systematic allocation of the amount of premium 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 premium on bonds is credited in interest expenses of bonds account. Some companies amortize the premium on bonds to reflect the true interest expenses on bonds