The amortization of a discount on bonds payable:
A)decreases the carrying value of the bonds
B)increases the amount of interest expense recorded for the bonds
C)decreases the amount of interest expense recorded for the bonds
D)has no effect on the amount of interest expense recorded for the bonds

Question

Quizplus · Accepted Answer

The amortization of a discount on bonds payable increases the amount of interest expense recorded for the bonds. This is because the discount represents an additional cost of borrowing that is recognized over the life of the bond, effectively increasing the interest expense beyond the stated interest rate.

The Amortization of a Discount on Bonds Payable