Discount on bonds payable is considered to be additional interest expense of the company that issues the bond.

Question

Quizplus · Accepted Answer

Discount on bonds payable represents the difference between the face value of the bond and the amount paid by the investor. As the company has to pay back the face value of the bond at maturity, the discount is amortized over the life of the bond and considered as additional interest expense.

Discount on Bonds Payable Is Considered to Be Additional Interest