The Premium on Bonds Payable account is shown on the balance sheet as

a. a nonoperating income that is recognized in the year the bond is issued.

b. a short-term liability that is repaid to the borrower after 12 months from the issue date.

c. a long-term liability account that is repaid in the year the bond matures.

d. a separate valuation account that increases the bond liability to market value at the issue date.