Question

The balance in the Bonds Payable is a credit of $80,000. The balance in the Premium on Bonds Payable is a credit of $1,100. What is the bond carrying​ amount?

A. $1,100
B. $80,000
C. $81,100
D. $78,900

Answer 1

The bond carrying amount is the sum of the Bonds Payable and the Premium on Bonds Payable balances, which in this case is $81,100.

Step-by-step explanation:

The bond carrying amount is the net value of a bond on the balance sheet. It is determined by adding the balance in the Bonds Payable account to the balance in the Premium on Bonds Payable account. In this case, the Bonds Payable has a credit balance of $80,000 and the Premium on Bonds Payable has a credit balance of $1,100.

Therefore, the bond carrying amount would be calculated as follows:

• Bonds Payable (credit): $80,000
• Premium on Bonds Payable (credit): $1,100
• Bond Carrying amount: $80,000 + $1,100 = $81,100

The correct answer to what the bond carrying amount is: C. $81,100.