Debt repayment, not depreciation
This concept concerns repayment of debt and is not the accounting depreciation of fixed assets. With partial repayment, interest payment and returned principal must be tracked separately. SEC and FINRA educational materials explain that a bond’s cash flow is determined by its contractual terms.[14](#source-cm-corporate)[15](#source-cm-bonds)
A declining balance
If a coupon is calculated on a declining balance, the cash amount of interest may fall when the rate stays unchanged. The documents must establish the base; it should not be assumed. Purchase value also depends on current principal, quotation and accrued interest. Returning principal is not additional interest income. Receiving part of the money early creates a separate question about its later use and does not guarantee repayment of the remainder. The [amortizing-bond cash-flow guide](/guides/amortizing-bond-cash-flow/) demonstrates how to check every column with fictional numbers.