Which Financial Statements Are Affected by the Transaction That Includes

question 112

Essay

Which financial statements are affected by the transaction that includes the payment of bond interest and the related amortization of a discount? Describe how each statement is affected.

---

Definitions:

Asset Accounts

Accounts on a company's balance sheet that represent the resources owned by the company which have economic value and can provide future benefits.

Debits

Entries on the left side of an accounting ledger, representing increases in assets or expenses and decreases in liabilities or equity.

Equipment

Tangible property used in the operations of a business, often contributing to the production of goods and services, and generally considered a long-term asset.

Cash

Currency and coins, along with bank balances, checks, and money orders, that are readily available for use.