A Bond Was Issued at a Premium

question 168

Multiple Choice

A bond was issued at a premium. The journal entry to record the semiannual interest payment would include:

• A)a debit to interest expense, a debit to premium on bonds payable and a credit to cash.
• B)a debit to interest expense, a credit to premium on bonds payable and a credit to cash.
• C)a debit to interest expense, a debit to cash and a credit to premium on bonds payable.
• D)a debit to premium on bonds payable and a credit to cash.

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Definitions:

Extending Credit

A financial term referring to the offering of a loan or the ability to purchase goods or services before payment, based on the trust that payment will be made in the future.

Accounts Payable

Obligations or debts owed by a company to suppliers or creditors for goods and services received.

Age Analysis

A method of examining data to categorize or understand trends within certain age groups.

Encounter Form

A form that combines the charges for services rendered, an invoice for payment or insurance copayment, and all the information for submitting an insurance claim; also known as a superbill.