Which of the Following Is TRUE of a Discount on Bonds

Multiple Choice

Which of the following is TRUE of a discount on bonds payable?

A) A discount on bonds payable is added to the bonds payable balance and shown with long-term liabilities on the balance sheet.
B) A discount on bonds payable is subtracted from the bonds payable balance and shown with the current liabilities on the balance sheet.
C) A discount on bonds payable is added to the bonds payable balance and shown with owner's equity on the balance sheet.
D) A discount on bonds payable is subtracted from the bonds payable balance and shown with long-term liabilities on the balance sheet.