What is the typical balance type for Bonds Payable?

Bonds Payable typically carries a credit balance. This is because Bonds Payable represents a liability for the issuing company. When a company issues bonds, it is borrowing money from bondholders with the promise to pay back the principal amount plus interest over a specified period.

Liabilities are recorded on the balance sheet with a credit balance. This reflects the company’s obligation to pay back the borrowed amount. As the company makes payments toward the principal and interest, the balance of Bonds Payable decreases, but while the liability exists, it remains a credit balance.

Assets and expenses would usually carry debit balances, while revenues also have credit balances. A zero balance would imply there are no outstanding obligations, which is not typically the case for Bonds Payable, and a negative balance is not applicable since it does not conform to standard accounting principles for liabilities.