Which of the Following Entries Will Be Necessary to Close

question 159

Multiple Choice

Which of the following entries will be necessary to close the insurance expense account at the end of the year?

• A) Debit Insurance expense and credit Income summary.
• B) Debit Insurance expense and credit Capital.
• C) Debit Capital and credit Insurance expense.
• D) Debit Income summary and credit Insurance expense.

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Definitions:

Coupon Payments

Coupon payments are periodic interest payments made by bond issuers to bondholders, typically based on the bond's face value and stated interest rate.

Par Value

The face value of a bond or the stock value stated in the corporate charter, often used as a bookkeeping figure rather than the market value.

Corporate Bonds

Debt securities issued by corporations to raise funding, which pay periodic interest payments to investors until the maturity date when the principal is repaid.

Over The Counter

A decentralized market where securities are traded directly between parties without the supervision of an exchange.