The Journal Entry to Record the Payment of a Monthly

question 47

Multiple Choice

The journal entry to record the payment of a monthly utility bill would include

• A) a debit to Utilities Expense and a credit to Capital.
• B) a debit to Capital and a credit to Cash.
• C) a debit to Utilities Expense and a credit to Cash.
• D) a debit to Utilities Expense and a credit to Accounts Payable.

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Definitions:

TIPS

Treasury Inflation-Protected Securities, which are U.S. government bonds that are indexed to inflation to protect investors from the negative effects of rising prices.

Coupon

The annual interest rate paid by a bond, expressed as a percentage of the face value, or the actual amount paid out to a bondholder annually.

Inflation

The rate at which there's an upward movement in the general price level of goods and services, weakening the purchasing capacity.

Convexity

A measure of the curvature or the degree of the curve in the relationship between bond prices and bond yields, indicating how the duration of a bond changes as the interest rate changes.