Premium on Bonds Payable should be classified as an adjunct-liability account.

Name: Premium on Bonds Payable should be classified as an adjunct-liability account.
Brand: Quizplus
Rating: 5.0 (44 reviews)

Question

Quizplus · Accepted Answer

Premium on Bonds Payable represents the excess amount paid by investors above the face value of a bond. Since it is directly related to the Bonds Payable account, it is considered an adjunct-liability account and is reported on the balance sheet as a separate line item under the Bonds Payable account.

Premium on Bonds Payable Should Be Classified as an Adjunct-Liability