In the balance sheet, the account, Discount on Bonds Payable, is:
A) added to bonds payable.
B) deducted from bonds payable.
C) classified as a stockholders' equity account.
D) classified as a revenue account.

Question

Quizplus · Accepted Answer

Discount on Bonds Payable is a contra account that offsets the Bonds Payable account. Therefore, it is deducted from the Bonds Payable to arrive at the net carrying value of the bonds.

In the Balance Sheet, the Account, Discount on Bonds Payable