Question

Any unamortized discount is reported a.in the Stockholders' Equity section of the balance sheet. b.as a deduction to the face amount of the bonds. c.as an addition to the face amount of the bonds. d.on the income statement.

Answer 1

Answer:

Option B                      

Explanation:

The un-amortized debt discount can be defined as the difference between both the interest of a bond — the value of the bond at redemption — and the profits from the issuing company's sale of the bond, less than the amount currently amortised on the statement of profit and loss.

The authorizing agency may either agree to pay the full amount of the rebate or view the discount as a profit to be amortized. Some amount which has yet to be spent is alluded to as the reduction for un-amortized bonds.