The Entry to Record the Amortization of a Premium on Bonds

question 26

Multiple Choice

The entry to record the amortization of a premium on bonds payable on an interest payment date would

• A) a debit to Premium on Bonds Payable and a credit to Interest Revenue
• B) a debit to Interest Expense and a credit to Premium on Bond Payable
• C) a debit to Interest Expense and Premium on Bonds Payable and a credit to Cash
• D) a debit to Bonds Payable and a credit to Interest Expense

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Definitions:

Cross-Trained

Cross-trained refers to individuals who have been trained in multiple skills or job functions, allowing for greater flexibility in staffing and operations.

Direct Labor

The labor costs directly associated with the production of goods or services.

Process Costing

A method of costing used primarily in manufacturing where costs are allocated to batches or production runs, making it easier to determine the cost per unit.

Paper Manufacturer

A company engaged in the production and sale of paper products, including writing, printing, and packaging materials.