Question

8. What is the normal balance of Bonds Payable?

Answer 1

Solution:

The normal balance of Bonds Payable is a debit balance.

When a bond sells at a discount, a price less than face value, the amount of the discount is deducted from Discount on Bonds Payable. The face amount recorded in bonds payable less the unamortized discount recorded in the discount on bonds payable account equals the bond's carrying value.