Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Any unamortized premium should be reported on the balance sheet of the issuing corporation as:

a deduction from the face value of bonds payable under long-term liabilities

a current liability

an addition to retained earnings

an addition to the face value of bonds payable under long-term liabilities

Previous problemNext problem

Verified step by step guidance

Understand the concept of bond premium: A bond premium occurs when bonds are issued at a price higher than their face value. This happens when the stated interest rate on the bond is higher than the market interest rate.

Recognize how unamortized bond premium is treated: Unamortized bond premium represents the portion of the premium that has not yet been allocated to interest expense over the life of the bond.

Identify the correct reporting method: According to accounting standards, any unamortized premium is added to the face value of bonds payable on the balance sheet under long-term liabilities. This reflects the total liability owed by the issuing corporation.

Understand why other options are incorrect: The premium is not deducted from the face value of bonds payable, nor is it classified as a current liability or added to retained earnings. These treatments would misrepresent the financial position of the corporation.

Apply this knowledge to the balance sheet: When preparing the balance sheet, ensure that the unamortized premium is combined with the face value of bonds payable under the long-term liabilities section to accurately reflect the total bond liability.