The income statement showed bond interest expense of $11,520 while the statement of financial position showed that the carrying amount of the bonds payable had increased by $1,520.Assuming no other transactions affected bonds during the period, the cash paid for bond interest was

Question

Quizplus · Accepted Answer

The increase in the carrying amount of bonds payable by $1,520 indicates that this amount was not paid in cash but added to the liability. Therefore, the cash paid for bond interest is the interest expense minus the increase in the carrying amount: $11,520 - $1,520 = $10,000.

The Income Statement Showed Bond Interest Expense of $11,520 While