Choice "D" is correct. Cumulative foreign exchange translation loss should be reported as a component of accumulated other comprehensive income. A cumulative foreign exchange translation loss would be a debit to accumulated other comprehensive income; therefore, contra to shareholders' equity.Rule: "Translation" adjustments are not included in determining net income for the period but are disclosed and accumulated as a component of other comprehensive income in consolidated equity until sale or until liquidation of the investment takes place.
Choice "c" is incorrect. Discount on convertible bonds that are common stock equivalents should be shown as a contra account to bonds payable and are shown as part of the "carrying amount" of bonds payable on the balance sheet.
Choice "a" is incorrect. Bond premiums are included as part of the "carrying amount" of bonds payable on the balance sheet.
Choice "b" is incorrect. Organization costs are expensed as incurred.