Question

The balance in the bonds payable account is a credit of 74,000. The balance in the discount on bonds payable account is a debit of3,650. What is the bond's carrying amount?

Answer 1

The bond's carrying amount can be calculated by subtracting the balance in the Discount on Bonds Payable account from the balance in the Bonds Payable account.

Step-by-step explanation:

The bond's carrying amount can be calculated by subtracting the balance in the Discount on Bonds Payable account from the balance in the Bonds Payable account. In this case, the Bonds Payable account has a credit balance of $74,000 and the Discount on Bonds Payable account has a debit balance of $3,650. So, the bond's carrying amount would be:

Carrying Amount = Bonds Payable - Discount on Bonds Payable

Carrying Amount = $74,000 - $3,650

Carrying Amount = $70,350