When the cash proceeds from a bond issued with detachable stock warrants exceed the sum of the par value of the bonds and the fair market value of the warrants, the excess should be credited to

Question

Quizplus · Accepted Answer

The excess amount should be credited to "premium on bonds payable" because it represents the additional amount received over the par value of the bonds, which is typically recorded as a premium.

When the Cash Proceeds from a Bond Issued with Detachable