Asked by Roberta McGuire on May 22, 2024
Verified
The Discount on Bonds Payable account is:
A) A liability.
B) A contra liability.
C) An expense.
D) A contra expense.
E) A contra equity.
Discount on Bonds Payable
The difference between a bond's face value and its selling price when it is sold for less than its face value.
Contra Liability
An account that offsets a liability account on a company's balance sheet, such as discounts on bonds payable, which reduce the total amount of bonds payable.
Liability
An obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services, or other yielding of economic benefits in the future.
- Comprehend the principles and consequences of bond valuation, encompassing discounting, premium pricing, and methods of amortization.
Verified Answer
Learning Objectives
- Comprehend the principles and consequences of bond valuation, encompassing discounting, premium pricing, and methods of amortization.
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