Asked by Selia Bennett on Jul 01, 2024
Verified
The balance in Premium on Bonds Payable should be reported as a deduction from Bonds Payable on the balance sheet.
Premium On Bonds
The amount by which the price paid for a bond exceeds its face value, often due to interest rates being lower than the bond's coupon rate.
- Investigate the presentation of bonds on the balance sheet, specifically addressing the notions of carrying value and amortization consequences.
Verified Answer
SR
Selena Robinson6 days ago
Final Answer :
False
Explanation :
The balance in Premium on Bonds Payable is added to Bonds Payable on the balance sheet because it represents an amount paid over the face value of the bonds, increasing the total value of the liability reported.
Learning Objectives
- Investigate the presentation of bonds on the balance sheet, specifically addressing the notions of carrying value and amortization consequences.