When interest payments are made on a bond issued at face value,the journal entry would include:

Question

Quizplus · Accepted Answer

When interest payments are made on a bond issued at face value, the company needs to record the interest expense incurred on the bond in its books. So, a debit to Bond Interest Expense is required. At the same time, the company pays cash for the interest expense, so a credit to Cash is also necessary. Hence, both (A) and (B) are the correct choices.

When Interest Payments Are Made on a Bond Issued at Face