USA Calculating Accrued Interest on Bonds Payable

SDR

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I know the basics of the calculation. My questions is really about the timing. A client paid their scheduled bond payment on 5/16, two weeks prior to the scheduled due date of 6/1. I need to book an accrual for interest as of 6/30 based on the amount of interest per the amortization schedule. My question is does the accrual period begin from the last actual date of payment(5/16) or the scheduled accrual date of 6/1? Note: Calculation is based on 30/360. Thanks for any help! Also, please provide any FASB/GASB guidance if possible.
 

kirby

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The answer lies within the bond agreement. You only have a calculation problem if the agreement calls for a "daily simple interest calculation" , which is very unusual for a bond. Otherwise most bonds read as " pay $x on due date, else there is a late payment charge" . The beauty of that is it maintains the original amort schedule without having to worry or calculate a new amort if a payment is a few days late.
And in your case, if NOT daily simple interest then if you pay early - well then you paid early and you give effect to that on the balance sheet and we still follow the same amort & accrual schedule.
So you need to read the bond agreement.
This is a "business practice/common sense" item. No FASB I know will cover this.
 
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