Any unamortized premium should be reported on the balance sheet of the issuing corporation as
A) a direct deduction from the face amount of the bonds in the Liabilities section
B) paid-in capital
C) a direct deduction from retained earnings
D) an addition to the face amount of the bonds in the Liabilities section

Question

Quizplus · Accepted Answer

Any unamortized premium should be reported on the balance sheet of the issuing corporation as an addition to the face amount of the bonds in the Liabilities section. This is because the premium represents an amount that was paid in excess of the face value of the bonds and is therefore considered a liability. As the premium is amortized over time, it will reduce the carrying value of the liability.

Any Unamortized Premium Should Be Reported on the Balance Sheet