The balance in Discount on Bonds Payable that is applicable to bonds due in three years would be reported on the balance sheet in the section entitled
A) Investments
B) Long-term liabilities
C) Current assets
D) Intangible assets

Question

Quizplus · Accepted Answer

Discount on Bonds Payable is a contra account to Bonds Payable and represents the difference between the face value of the bonds and the amount received from their sale. Since the bonds in question are due in three years, they would be classified as a long-term liability on the balance sheet. Therefore, the balance in Discount on Bonds Payable that is applicable to those bonds would also be reported in the Long-term liabilities section of the balance sheet.

The Balance in Discount on Bonds Payable That Is Applicable