Which of the following statements about discount on bonds payable is NOT true?
A)Discount on bonds payable is a contra account to bonds payable.
B)Subtracting the discount account from the bonds payable account yields the carrying amount of the bonds.
C)Adding the discount account to the bonds payable account yields the carrying amount of the bonds.
D)Discount on bonds payable decreases the company's liabilities.

Question

Quizplus · Accepted Answer

Adding the discount account to the bonds payable account does not yield the carrying amount of the bonds. The correct method is to subtract the discount account from the bonds payable account to arrive at the carrying amount.

Which of the Following Statements About Discount on Bonds Payable