The Entry to Record the Amortization of a Premium on Bonds

question 50

Multiple Choice

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

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

---

Definitions:

Discontinued Operations

Parts of a company's business that have been sold or otherwise disposed of, with their financial results reported separately from ongoing operations.

Cost of Goods Sold

The immediate expenses linked to the creation of a company's sold products, encompassing both the costs of materials and labor.

Net Sales

Total revenue from sales of goods or services, less returns, allowances for damaged goods, and discounts.

Operating Expense

Expenses incurred during normal business operations, such as rent, utilities, and payroll, excluding costs associated with the production of goods sold.