Any unamortized bond discount should be reported on the balance sheet of the issuing corporation as a(n)
A)asset.
B)direct deduction from retained earnings in the stockholders' equity section.
C)addition to the face amount of the bonds in the liability section.
D)direct deduction from the face amount of the bonds in the liability section.

Question

Quizplus · Accepted Answer

Any unamortized bond discount should be reported on the balance sheet of the issuing corporation as a direct deduction from the face amount of the bonds in the liability section. This is because the bond discount is a reduction in the actual amount of borrowed funds, and therefore the liability should be reflected as the net amount after deducting the discount.

Any Unamortized Bond Discount Should Be Reported on the Balance