How Will a Discount on Bonds Payable Account Appear on the Balance

question 82

Multiple Choice

How will a discount on bonds payable account appear on the balance sheet?

• A) current liability
• B) long-term liability
• C) current asset
• D) contra-liability

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Definitions:

Bond Indentures

A legal and binding contract between a bond issuer and the bondholders, specifying the terms of the bond such as interest payments and the maturity date.

Debt Financing

A method of funding in which a company raises capital by borrowing funds, typically through loans or issuing bonds.

Equity Financing

The process of raising capital through the sale of shares in a company, effectively exchanging ownership interests for funds.

Secondary Markets

Financial markets where previously issued securities and financial instruments such as stock, bonds, options, and futures are bought and sold.