The Journal Entry to Record Payment of the Bond Payable

question 117

Multiple Choice

The journal entry to record payment of the bond payable at maturity will include a:

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

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Definitions:

Expense Account

An account where costs associated with the operations of a business, such as rent, utilities, and salaries, are recorded.

Asset Account

An account that represents a tangible or intangible item of value owned by a company, such as cash, inventory, or equipment.

Revenue Account

An account that records the income earned from normal business operations, such as sales of goods or services.

Liability Account

An account recording a company's debts or obligations arising from past transactions or events.