Discount on bonds is an additional cost of borrowing and should be recorded as interest expense over the life of the bonds.

Question

Quizplus · Accepted Answer

Discount on bonds represents the difference between the face value of a bond and the amount paid for it. This discount is an additional cost of borrowing and should be recorded as interest expense over the life of the bonds using the effective interest method. Therefore, the answer is true.

Discount on Bonds Is an Additional Cost of Borrowing and Should