What Effect Will the Following Adjusting Journal Entry Have on the Accounting

question 26

Multiple Choice

What effect will the following adjusting journal entry have on the accounting records?

• A) increase net income
• B) increase revenues
• C) decrease expenses
• D) decrease net book value

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Definitions:

Semiannual Interest

Interest calculated and paid twice a year, often related to bonds or loans with fixed interest rates.

Straight-line Method

A technique for computing depreciation or amortization that evenly divides the asset's cost over its expected lifespan.

Bond Liability

An obligation or debt represented by bonds issued by a company, which it is required to repay at a specified time with interest.