The account Discount on Bonds Payable actually represents interest expense and will be amortized over the life of the bond.

Question

Quizplus · Accepted Answer

Discount on Bonds Payable represents the difference between the face value of the bond and the amount received from issuing the bond. This discount is treated as interest expense and is amortized over the life of the bond using the effective interest method.

The Account Discount on Bonds Payable Actually Represents Interest Expense