Question

What type of account is Discount on Bonds Payable and what is its normal​ balance? A. Reversing​ account; Debit B. Contra​ liability; Debit C. Contra​ liability; Credit D. Adjusting​ account; Credit

Answer 1

B. Contra​ liability; Debit

Step-by-step explanation:

Discount on the bond is contra liability account and it has debit balance because liabilities normally have a credit balance, so the contra account of liabilities must have a debit balance.

Discount on Asset is reported under the bond payable value. The net payable on the bond is calculated by deducting the discount on bond value from the bond payable value ( usually face value of the bond. )