AB sold its 10-year bond at a discount.In reporting the bonds and the related discount on a balance sheet shortly thereafter,the discount should be:

Question

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When a bond is sold at a discount, it means that the bond was sold for less than its face value. The discount represents the difference between the face value of the bond and the amount received from the sale. Therefore, the discount should be deducted from the bonds payable on the balance sheet. This will result in a net bond payable amount that reflects the true liability of the company.

AB Sold Its 10-Year Bond at a Discount