The carrying amount of bonds issued at a discount is calculated by:
A) subtracting Interest Expense from Bonds Payable
B) subtracting Interest Payable from Bonds Payable
C) subtracting Discount on Bonds Payable from Bonds Payable
D) subtracting the sum of Discount on Bonds Payable and Interest Payable from Bonds Payable

Question

Quizplus · Accepted Answer

The carrying amount of bonds issued at a discount is calculated by subtracting the Discount on Bonds Payable from Bonds Payable. This is because the Discount on Bonds Payable represents the amount by which the bond's face value exceeds the amount of cash received from the bond's sale. Therefore, to determine the carrying amount of the bond, the Discount on Bonds Payable is subtracted from the Bonds Payable.

The Carrying Amount of Bonds Issued at a Discount Is