Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations. Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value. Premium on bonds payable: It occurs when the bonds are issued at a high price than the face value. To Explain : Straight- line amortization method, in regard to a bond discount or premium.

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Chapter 12, Problem 11RQ

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Bonds Payable: Bonds payable are referred to long-term debts of the business, issued to various lenders known as bondholders, generally in multiples of $1,000 per bond, to raise fund for financing the operations.

Discount on bonds payable: It occurs when the bonds are issued at a low price than the face value.

Premium on bonds payable: It occurs when the bonds are issued at a high price than the face value.

To Explain: Straight- line amortization method, in regard to a bond discount or premium.

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