Question

The balance in Unamortized Discount on Bonds Payable
a. should be reported on the balance sheet as a deduction from the face amount of the related bonds payable.
b. should be reported separately in the Current Liabilities section of the balance sheet.
c. would be added to the face amount of the related bonds payable on the balance sheet.
d. should be reported in the Paid-In Capital section of the balance sheet.

Answer 1

Answer:

Correct option is (a)

Explanation:

Any difference in the amount of par value of bond and the cost at which it was acquired. The organization can either choose to expense the discount or held the same as an asset that is amortized over the years till maturity of bond.

Unamortized discount is the amount that is not yet expensed. The same is reported on the balance sheet as a deduction from face value of bond.