The amortization of the bond discounts a) decreases the carrying value of the bond, while the amortization of the bond premium increases the carrying value of the bond.
In the field of business, amortization can be described as the effective way of making payment of debts easier by paying them in fixed amounts over a period of time. As the bond discount is lower than the face value of a product, hence the amortization of a bond discount will decrease the carrying value of the bond.
On the other hand, the bond premium increases the face value of the product. Hence, when amortization of a bond premium occurs, then the carrying value of the product will increase by the time the debt has been cleared.
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