The Year-End Adjusting Entry Required for Bonds Issued at a Discount

question 28

Multiple Choice

The year-end adjusting entry required for bonds issued at a discount would require

• A) a debit to Bond Interest Expense, a debit to Discount on Bonds Payable, and a credit to Cash.
• B) a debit to Bond Interest Expense, a debit to Discount on Bonds Payable, and a credit to Bond Interest Payable.
• C) a debit to Bond Interest Expense, a credit to Discount on Bonds Payable, and a credit to Cash.
• D) a debit to Bond Interest Expense, a credit to Discount on Bonds Payable, and a credit to Bond Interest Payable.

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Definitions:

Long Term

Referring to an extended period of time, typically considered to be several years or more.

Past Data

Refers to previously collected or observed data used for analysis, comparison, or prediction.

Subjective Approach

A method based on personal opinions, interpretations, points of view, emotions and judgment.

Financial Accounting

The field of accounting that focuses on reporting a company's financial information to external users, such as investors and creditors.