Amortizing the Discount on a Bond Payable

question 83

Multiple Choice

Amortizing the discount on a bond payable:

• A) increases the face value of the bonds
• B) decreases the face value of the bonds
• C) increases the carrying amount of the bonds
• D) decreases the carrying amount of the bonds

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Definitions:

Adjusted Trial Balance

A listing of all company accounts that will appear in the financial statements after adjustments have been made for journal entries.

Current Liability

An obligation due to be paid within a year, including accounts payable, short-term loans, and other similar debts.

Notes Payable

Financial obligations represented by promissory notes, where the borrower agrees to pay back a specified sum of money on demand or at a determined future date.

Prepaid Expenses

Expenses paid in advance by a company for goods or services to be received in the future.