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

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Definitions:

Precambrian

denotes the vast period of time before the Cambrian period, covering the formation of the Earth until about 541 million years ago.

Paleozoic

An era of geological time from about 541 to 252 million years ago, marked by the development of early life forms to the advent of reptiles and the end of the Permian period.

Mesozoic

An era of geological time from about 252 to 66 million years ago, known as the "Age of Reptiles" and marked by the dominance of dinosaurs.

Cenozoic

The most recent of the three major subdivisions of animal and plant life geologic time, covering the period from 66 million years ago to the present.