Which of the following is TRUE of a discount on debentures payable?
A)A discount on debentures payable is added to the debentures payable balance and shown with non- current liabilities on the balance sheet.
B)A discount on debentures payable is subtracted from the debentures payable balance and shown with the current liabilities on the balance sheet.
C)A discount on debentures payable is subtracted from the debentures payable balance and shown with non- current liabilities on the balance sheet.
D)A discount on debentures payable is added to the debentures payable balance and shown with owners' equity on the balance sheet.

Question

Quizplus · Accepted Answer

A discount on debentures payable is a contra liability account that reduces the carrying amount of the debentures, so it is subtracted from the debentures payable balance and shown with non-current liabilities on the balance sheet.

Which of the Following Is TRUE of a Discount on Debentures