The Discount on Bonds Payable account is
A)A liability
B)A contra expense
C)An expense
D)A contra liability
E)A contra equity

Question

Quizplus · Accepted Answer

The Discount on Bonds Payable account is a contra liability account. It is used to reduce the carrying amount of bonds payable on the balance sheet to reflect the fact that the bonds were issued at a discount. As the discount is amortized over the life of the bond, the balance of the Discount on Bonds Payable account decreases.

The Discount on Bonds Payable Account Is