If Bonds Are Issued for a Price Below Their Face

question 16

Multiple Choice

If bonds are issued for a price below their face value, the bond discount should be

• A)charged to expense on the date the bonds are issued.
• B)shown as an addition to Bonds Payable in the Long-Term Liabilities section of the balance sheet.
• C)amortized over the life of the bond issue.
• D)shown as a current liability on the balance sheet.

---

Definitions:

Government

The organization, or system of organizations, through which a political unit exercises authority and performs functions.

Subsidies

Financial support extended by the government to businesses, organizations, or individuals aimed at promoting economic and social policies.

American Democracy

A form of government where power is vested in the people, who rule either directly or through freely elected representatives, grounded in principles such as freedom of speech, majority rule, and checks and balances.

Political Issues

Topics or matters concerning the governance of a society, including policies, legislation, political ideologies, and public administration.