When the bond liability reported on the statement of ﬁnancial position increases each year, this indicates that the bond was:
A) issued at face value.
B) issued at a discount.
C) issued at a premium.
D) issued at net realizable value.

Question

Quizplus · Accepted Answer

When a bond is issued at a discount, the liability reported on the statement of financial position increases each year as the discount is amortized and added to the carrying amount of the bond until it reaches its face value at maturity.

When the Bond Liability Reported on the Statement of ﬁNancial