The Discount on Bonds Payable account is:

A) A liability.
B) A contra liability.
C) An expense.
D) A contra expense.
E) A contra equity.

Discount on Bonds Payable

The difference between a bond's face value and its selling price when it is sold for less than its face value.

Contra Liability

An account that offsets a liability account on a company's balance sheet, such as discounts on bonds payable, which reduce the total amount of bonds payable.

Liability

An obligation of an entity arising from past transactions or events, the settlement of which may result in the transfer or use of assets, provision of services, or other yielding of economic benefits in the future.