The Adjusting Entry to Record the Amortization of a Discount

question 111

Multiple Choice

The adjusting entry to record the amortization of a discount on bonds payable is

• A) debit Discount on Bonds Payable, credit Interest Expense
• B) debit Interest Expense, credit Discount on Bonds Payable
• C) debit Interest Expense, credit Cash
• D) debit Bonds Payable, credit Interest Expense

---

Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, with elasticity referring to the degree of responsiveness.

Good Substitutes

Products or services that can be used in place of each other, having a high cross-elasticity of demand.

Income Elasticity Coefficient

A measure indicating how much the quantity demanded of a good responds to change in consumer income.

Recessions

Periods of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in successive quarters.