Final answer:
The statement is true as the discount on bonds payable does decrease with each interest payment when using the straight-line amortization method and the bonds were sold at a discount.
Step-by-step explanation:
The statement is true: when using the straight-line amortization method, the discount on bonds payable does decrease with each interest payment if the bonds sold at a discount. The amortization of the discount on bonds payable is a process where the amount of the discount is gradually written off to interest expense over the life of the bonds. At issuance, when bonds are sold at a discount, the selling price is less than the face value because the stated interest rate on the bonds is lower than the market interest rate. Over the life of the bonds, with each interest payment, a portion of this discount is amortized to interest expense, thereby increasing the amount of expense recognized. This results in the carrying amount of the bond increasing incrementally until it reaches the face value of the bond at maturity.