The Journal Entry to Record a Semiannual Interest Payment on a Bond

question 48

Multiple Choice

The journal entry to record a semiannual interest payment on a bond payable:

• A) debits interest expense and credits bonds payable.
• B) debits interest expense and credits cash.
• C) debits cash and credits interest payable.
• D) debits cash and credits interest expense.

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Definitions:

Segmented Income Statement

A financial statement that breaks down revenues, cost of goods sold, and expenses by different segments of a business, such as product lines or geographical areas.

Contribution Format

A financial reporting format that focuses on distinguishing between fixed and variable costs and calculating the contribution margin.

Common Fixed Expenses

Overhead costs shared by multiple business units or product lines, which are not attributable to any single unit or product.

Break-even

The point at which total revenues equal total expenses, resulting in no net loss or gain.