Which of the following is true of a Discount on Bonds Payable account?
A)It is added to the Bonds Payable balance and shown with long-term liabilities on the balance sheet.
B)It is subtracted from the Bonds Payable balance and shown with the current liabilities on the balance sheet.
C)It is added to the Bonds Payable balance and shown with owner's equity on the balance sheet.
D)It is subtracted from the Bonds Payable balance and shown with long-term liabilities on the balance sheet.

Question

Quizplus · Accepted Answer

A discount on bonds payable is a contra-liability account, which means it is subtracted from the Bonds Payable balance and shown with long-term liabilities on the balance sheet.

Which of the Following Is True of a Discount on Bonds