Question

Welch Corporation​'s trial balance shows $ 158,000 face value of bonds with a discount balance of $ 1,800. The bonds mature in 10 years. How will the bonds be presented on the balance​ sheet?

Answer 1

The bonds be presented on the balance​ sheet at discount balance of $ 1,800.

Step-by-step explanation:

The discount balance is the Present Value of Future Cash Inflows.

The Present Value is shown instead of Face Value as the Value Carried by the bonds and subsequently, this value is adjusted over the 10 year period with interest applied on bonds to reach the face value of $ 158,000.