A bond premium should be reported in the balance sheet
A) at the present value of the future reduction in bond interest expense due to the premium.
B) as a deferred credit.
C) along with other premium accounts such as those resulting from stock transactions.
D) as a direct addition to the face amount of the bond.

Question

Quizplus · Accepted Answer

A bond premium is reported in the balance sheet as a direct addition to the face amount of the bond. This reflects the additional amount investors are willing to pay over the bond's face value, and it is amortized over the life of the bond to reduce the bond's interest expense.

A Bond Premium Should Be Reported in the Balance Sheet