indenture (plural indentures) (law) A contract which binds a person to work for another, under specified conditions, for a specified time (often as an apprentice). (law) A document, written as duplicates separated by indentations, specifying such a contract. An indentation. (Can we add an example for this sense?) Translations
What is an 'Interest Expense'. The cost incurred by an entity for borrowed funds. Interest expense is a non-operating expense shown on the income statement. It represents interest payable on any type of borrowings â bonds, loans, convertible debt or lines of credit. It is basically calculated as the interest rate times the outstanding principal amount of the debt. Interest expense on the income statement represents interest accrued during the period covered by the financial statements, and not the amount of interest actually paid over that period.
Company SD would record the amortization and interest expense using the following journal entry: In year 2 the carrying amount would be $93,662 ($92,420 plus the amortized bond discount of $1,242). This would lead to interest expense of $9,366. Since interest paid or payable would be the same i.e. $8,000 this would lead to a higher figure for bond discount amortized during the period.