The Entry to Record the Issuance of a Bond Between

question 115

Multiple Choice

The entry to record the issuance of a bond between interest payment dates will include a:

• A)debit to Cash; credit to Bonds Payable; credit to Bonds Interest Payable.
• B)debit to Bonds Payable; credit to Cash.
• C)debit to Bond Interest Expense; credit to Bond Interest Payable.
• D)debit to Bond Interest Payable; credit to Bond Interest Expense.

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Definitions:

Yield To Call

The yield to call is the return an investor would receive if they held a bond until its call date, when the issuer has the option to repay the bond before its maturity date at a specified price.

Nominal Yield

The yearly interest income from a bond or fixed-income security, expressed as a percentage of the bond's face value.

Semiannually

Occurring twice a year, typically every six months.

Call Price

The price at which a bond or other security can be repurchased by the issuer before its maturity date, usually at a premium to the face value.