Which of the following statements about the issuance of bonds at a discount is not correct?
A)The contra liability account,Discount on Bonds Payable,is amortized each year by shifting part of its balance to interest expense.
B)As the current date approaches the maturity date,the carrying value of the bond approaches the face value of the bond.
C)At the date of issuance,the market interest rate was higher than the stated interest rate.
D)The account used to record the discount is a normal credit balance account.

Question

Quizplus · Accepted Answer

Discount on Bonds Payable is a contra-liability account and,as such,has a normal debit balance.

Which of the Following Statements About the Issuance of Bonds