The balance in the Bonds Payable account is a credit of $74,000.The balance in the Discount on Bonds Payable account is a debit of $2,450.The bond's carrying amount is $71,550.

Question

Quizplus · Accepted Answer

The bond's carrying amount is calculated as the face value of the bond minus any discount or plus any premium. In this case, the face value of the bond is not given, but we can calculate it by adding the balance in the Bonds Payable account ($74,000) to the balance in the Discount on Bonds Payable account ($2,450), which gives us a total of $76,450. Subtracting the discount from the face value gives us the carrying amount of $76,450 - $2,450 = $71,550, which matches the given figure. Therefore, the statement is true.

The Balance in the Bonds Payable Account Is a Credit