If a company sells its 20-year bonds at a discount, how is the discount account reported on the balance sheet?
A) unearned liability
B) addition to the bonds payable
C) accrued expense
D) deduction from bonds payable

Question

Quizplus · Accepted Answer

The discount on bonds payable is reported on the balance sheet as a deduction from the bonds payable account. This reflects that the bonds were sold for less than their face value.

If a Company Sells Its 20-Year Bonds at a Discount