A Company Prepared the Following Journal Entry: Which of the Following

question 61

Multiple Choice

A company prepared the following journal entry: Which of the following statements correctly describes the effect of this journal entry on the financial statements?
Interest expense
Discount on bonds payable
Cash

• A) The bonds payable book value increases by the amount of the credit to discount on bonds payable.
• B) The bonds payable book value decreases by the amount of the credit to cash.
• C)Stockholders' equity decreases by the amount of the credit to cash.
• D)The cash payment is reported as a cash flow from financing activities.

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