Which of the Following Journal Entries Was Created as the Result

question 121

Multiple Choice

Which of the following journal entries was created as the result of a deferral?

• A) Unearned revenue
• \( \quad \)\( \quad \)Revenue
• B) Interest expense
• \( \quad \)\( \quad \)Interest payable
• C) Cash
• \( \quad \)Revenue
• D) Salaries expense
• \( \quad \)Cash

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Definitions:

Bond Premium

The amount by which the market value of a bond exceeds its principal amount or par value, typically occurring when the bond's interest rate is higher than current market rates.

Straight-Line Method

A depreciation method that allocates an equal portion of the cost of a fixed asset to each accounting period over its useful life.

Amortization

The process of gradually reducing the cost of an intangible asset through scheduled periodic payments over its useful life.

Annual Interest Expense

Annual Interest Expense refers to the total cost incurred by an entity over a fiscal year for borrowing funds, encompassing interest payments on loans, bonds, and other forms of debt.