A convertible bond is one where the issuer can convert the bond from long-term to short-term. the bondholder can convert the bond into common stock at a future time. the issuer can retire the bond before its specified maturity date. the issuer can convert from a fixed interest rate to a floating rate. Question 22 The Premium on Bonds Payable account is shown on the balance sheet as a reduction of an expense. an adjunct liability account that increases carrying value of the bonds. a subtraction from a long-term liability. a contra asset. The current portion of long-term debt would appear on the balance sheet as contra-liability. long-term liability. current asset. current liability. When bonds are issued by a company, the accounting entry shows an increase in assets and an increase in liabilities. increase in assets and an increase in stockholders' equity. increase in liabilities and an increase in stockholders' equity. increase in liabilities and a decrease in stockholders' equity