When bonds are issued at a discount, both bonds payable on the balance sheet and interest expense on the income statement are affected.

Question

Quizplus · Accepted Answer

When bonds are issued at a discount, the bond payable on the balance sheet is reduced (since the bond was issued for less than the face value) and interest expense on the income statement is increased (since the bond must still be paid back with interest).

When Bonds Are Issued at a Discount, Both Bonds Payable