The journal entry to record a semiannual interest payment on a bond payable:
A) debits interest expense and credits bonds payable.
B) debits interest expense and credits cash.
C) debits cash and credits interest payable.
D) debits cash and credits interest expense.

Question

Quizplus · Accepted Answer

Semiannual interest payments on a bond payable represent an expense for the company that issues the bond, and the payment is typically made in cash. Therefore, the journal entry to record the payment would include a debit to interest expense (to recognize the cost) and a credit to cash (to document the payment). The other choices are incorrect because they do not reflect the proper accounting treatment for an interest payment on a bond payable.

The Journal Entry to Record a Semiannual Interest Payment on a Bond