Bond Amortization Schedule Calculator

Projections

Bond amortization schedule

Bond amortization schedule
Period	Payment	Interest	Amortization	Carrying value
1	$25,000	$26,893	-$1,893	$951,893
2	$25,000	$26,946	-$1,946	$953,839
3	$25,000	$27,001	-$2,001	$955,840
4	$25,000	$27,058	-$2,058	$957,898
5	$25,000	$27,116	-$2,116	$960,014
6	$25,000	$27,176	-$2,176	$962,190
7	$25,000	$27,238	-$2,238	$964,428
8	$25,000	$27,301	-$2,301	$966,729
9	$25,000	$27,366	-$2,366	$969,095
10	$25,000	$27,433	-$2,433	$971,528
11	$25,000	$27,502	-$2,502	$974,030
12	$25,000	$27,573	-$2,573	$976,603
13	$25,000	$27,646	-$2,646	$979,249
14	$25,000	$27,721	-$2,721	$981,970
15	$25,000	$27,798	-$2,798	$984,768
16	$25,000	$27,877	-$2,877	$987,645
17	$25,000	$27,958	-$2,958	$990,603
18	$25,000	$28,042	-$3,042	$993,645
19	$25,000	$28,128	-$3,128	$996,773
20	$25,000	$28,217	-$3,217	$1,000,000

Example scenario

A $950,000 discount bond with $1,000,000 face, 5% coupon, and semi-annual payments over 10 years produces rising interest expense each period under effective interest as the carrying value approaches par.

Sample inputs

Face (par) value ($): 1000000
Issue price ($): 950000
Stated coupon rate (%): 5
Term (years): 10

Sample results

Amortization method: See calculator result
Effective annual rate (%): See calculator result
Total interest expense ($): See calculator result

Common mistakes

Misunderstanding: Why does IFRS 9 require effective interest — Effective interest allocates total cost of borrowing over the life of the instrument in a way that reflects the constant yield on the carrying amount.
Misunderstanding: When is straight-line still used — Some simplified US GAAP contexts permit straight-line when the difference is immaterial.
Using default inputs without adjusting them to match your bond amortization schedule calculator scenario.
Treating this estimate as a final number without checking accounting assumptions that apply to your situation.

Decision guide

Bonds issued at a premium or discount require systematic amortization of the difference between issue price and face value over the bond's life. Use the result as a planning checkpoint — not a substitute for professional advice where rules are complex.

Trust the projection more when

Enter face value, issue price, coupon rate, term, and payment frequency
Select effective interest (required under IFRS 9) or straight-line for comparison
Review total interest expense and the amortization table

Revisit inputs when

Use each row's interest and amortization amounts for journal entry planning
Cross-check the effective rate with the Effective Interest Rate calculator
Your jurisdiction, tax status, or contract terms differ from the example.

Bonds issued at a premium or discount require systematic amortization of the difference between issue price and face value over the bond's life. IFRS 9 requires the effective interest method for financial liabilities at amortized cost. This calculator generates a period-by-period schedule showing coupon payments, interest expense, premium/discount amortization, and carrying value.

How to use this calculator

Enter face value, issue price, coupon rate, term, and payment frequency.
Select effective interest (required under IFRS 9) or straight-line for comparison.
Review total interest expense and the amortization table.
Use each row's interest and amortization amounts for journal entry planning.
Cross-check the effective rate with the Effective Interest Rate calculator.

Formula

Effective interest method: Interest expense = Opening carrying value × Periodic EIR. Amortization = Cash coupon − Interest expense. Carrying value = Prior carrying value − Amortization (discount bonds increase toward par; premium bonds decrease). Straight-line: Amortization = (Issue price − Face value) ÷ Total periods, constant each period.

Example

Frequently asked questions

Why does IFRS 9 require effective interest?

Effective interest allocates total cost of borrowing over the life of the instrument in a way that reflects the constant yield on the carrying amount. Straight-line distorts interest expense when issue price differs materially from par.

When is straight-line still used?

Some simplified US GAAP contexts permit straight-line when the difference is immaterial. This calculator includes straight-line for side-by-side comparison with effective interest.

What journal entries correspond to each period?

Issuer (discount bond): Debit Interest Expense, Credit Cash (coupon), Credit Bond Discount (amortization). The discount account is a contra-liability that reduces toward zero at maturity.

Does this handle callable bonds?

No. This model assumes fixed cash flows to maturity with no call options, conversions, or impairment events.

Bond Amortization Schedule Calculator