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Bonds issuance costs are the expenses related to the issuance of bonds by an issuer to investors. Such costs can be accounted for by capitalizing them first and then charging them to expense over the duration of bonds.

Examples of bonds issuance costs comprise commissions, legal costs, printing costs, accounting costs, and registration fees.

Option (b) is correct because these costs are listed as a decrease in the bond obligation on the balance sheet. These costs are then charged to the expense over the duration of the relative bond with the help of the straight-line method.

Option (a) is incorrect because the bond issuance costs are charged as an expense over the full period, that is, from the date of issue of bonds to the date of maturity of the bond.

Option (c) is incorrect as, under the amortization method, a similar amount is charged to expense in each term over the duration of bonds.

Option (d) is incorrect as the bond’s issuance costs are capitalized first and then charged to expense over the duration of bonds. However, if the bond issuance costs are paid initially, then the leftover cost of issuance of bonds that were capitalized at that time is charged as an expense when the leftover bonds mature.