When a Company Issues Bonds,how Are Unamortized Bond Discounts and Premiums

question 61

Multiple Choice

When a company issues bonds,how are unamortized bond discounts and premiums classified on the balance sheet?

• A) Bond discounts are classified as assets,and bond premiums are classified as contra-asset accounts.
• B) Bond discounts are classified as expenses,and bond premiums are classified as revenues.
• C) Bond premiums are classified as additions to,and bond discounts are classified as deductions from,the face value of bonds.
• D) None of these are correct.

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Definitions:

Cycloplegia

Paralysis of the ciliary muscle of the eye, resulting in a loss of accommodation and inability to focus on close objects.

Keratitis

Inflammation of the cornea, the clear outer layer at the front of the eye, potentially caused by infection or injury.

Blepharitis

An inflammation of the eyelid margins, often causing redness, irritation, and itchy eyelids together with dandruff-like scales on the eyelashes.

Lacrimal

Pertaining to the glands and ducts that produce and drain tears.