The balance in Discount on Bonds Payable A should be allocated to the remaining

Question

The balance in Discount on Bonds Payable

A should be allocated to the remaining periods for the life of the bonds by the straight-line method, if the results obtained by that method materially differ from the results that would be obtained by the effective interest rate method

B should be reported on the balance sheet as an asset because it has a debit balance

C would be added to the related bonds payable to determine the carrying amount of the bonds

D would be subtracted from the related bonds payable on the balance sheet

Explanation / Answer

Discount on bonds payable is always deducted from Face value of bonds payable to determine carrying value of bonds payable..

SO in this question answer is d) Would be subtracted from the related bonds payable on the balance sheet

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