The face value of a bond payable minus the current balance of the discount account or plus the current balance of the premium account is the bond's carrying amount.

Question

Quizplus · Accepted Answer

This statement is true. The carrying amount of a bond is its face value adjusted for any discount or premium amortization that has occurred since it was issued. If there is a discount, the carrying amount will be less than the face value, and if there is a premium, the carrying amount will be greater than the face value. The balance of the discount or premium account is added or subtracted from the face value to arrive at the carrying amount.

The Face Value of a Bond Payable Minus the Current