The unamortized premium on bonds payable and the unamortized discount on bonds payable will be presented with the related bonds as liabilities on the balance sheet. For example, if there is a premium on the bonds that will come due in 13 years, both the bonds payable and the premium on bonds payable will be reported together as a long-term liability. If the premium on bonds is associated with bonds that will be due in 11 months (and the corporation will be using its working capital to pay the bondholders), the premium and the bonds will be reported together as a current liability.
The discount on bonds payable will also cling to the bonds. If the bonds mature more than one year from the date of the balance sheet, both the bonds and the unamortized discount will be reported as a long-term liability. If the bonds are due in less than one year (and will require the use of the corporation's working capital), the discount and the bonds are reported as a current liability.
The premium and discount accounts are viewed as valuation accounts. The unamortized premium on bonds payable will have a credit balance that increases the carrying amount (or the book value) of the bonds payable. The unamortized discount on bonds payable will have a debit balance and that decreases the carrying amount (or book value) of the bonds payable.