Discount on Bonds Payable

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Discount on Bonds Payable is the account used when bonds are issued below face value; indicates market rate of interest is higher than contract rate. This account is a contra-liability account.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Discount on Bonds Payable. Account used when bonds are issued below face value; indicates market rate of interest is higher than contract rate. This account is a contra-liability account.

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