The discount on bonds payable:
A) decreases interest expense on the income statement.
B) increases interest expense on the income statement.
C) decreases the amount of cash paid to bondholders over the stated rate of interest.
D) increases the amount of cash paid to bondholders over the stated rate of interest.

Question

Quizplus · Accepted Answer

The discount on bonds payable represents additional interest expense that is amortized over the life of the bond, thus increasing the total interest expense reported on the income statement.

The Discount on Bonds Payable