The account Discount on Bonds Payable has a debit balance and should appear on the statement of financial position as an asset; the account Premium on Bonds Payable has a credit balance and should be classified as a liability.

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The account Discount on Bonds Payable has a credit balance and should be classified as a liability, while the account Premium on Bonds Payable has a debit balance and should appear on the statement of financial position as an asset.

The Account Discount on Bonds Payable Has a Debit Balance