The balance in the Bonds Payable account is a credit of $16,500.The balance in the Premium on Bonds Payable account is a credit of $1,000.The balance sheet will report the bond balance as $15,500.

Question

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The balance sheet will report the bond balance as $17,500 because the premium on bonds payable ($1,000) is added to the bonds payable ($16,500), not subtracted.

The Balance in the Bonds Payable Account Is a Credit