Which of the following statements about bonds and notes is not correct?
A)A company can borrow the funds necessary to finance its activities using bonds or promissory notes.
B)Borrowings using bonds or notes are initially recorded with a journal entry that debits Cash and credits the relevant liability account.
C)The journal entry that records interest owed on bonds and notes includes a debit to Interest Expense and a credit to Interest Payable.
D)Bonds Payable and Notes Payable are always classified as noncurrent liability accounts.

Question

Quizplus · Accepted Answer

Current liabilities are defined as short-term obligations that will be paid or fulfilled within the company's current operating cycle or within one year of the balance sheet date,whichever is longer.Depending on the time remaining to maturity,Bonds Payable and Notes Payable should be classified as current or noncurrent (or long-term)liabilities.

Which of the Following Statements About Bonds and Notes Is