A discount on bonds payable is reported in the financial statements as
A) a reduction from the bond liability on the balance sheet.
B) an expense on the income statement.
C) an assets on the balance sheet.
D) revenue on the income statement.

Question

Quizplus · Accepted Answer

A discount on bonds payable represents the difference between the face value of the bonds and the amount paid to issue the bonds. This discount is amortized over the life of the bond, and is treated as a reduction to the bond liability on the balance sheet. Therefore, choice A is the best answer.

A Discount on Bonds Payable Is Reported in the Financial