On October 31, 2011, Isaiah Industries recorded its semi-annual bond interest expense, which contained a credit to discount on bonds payable of $1,200. The adjusting entry on December 31, 2011 will show a credit to discount on bonds payable of:

Question

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The semi-annual bond interest expense only recognizes $1,200 of the total discount on bonds payable, therefore the remaining discount to be recognized is $1,200 - $800 = $400. This remaining discount will be credited in the adjusting entry on December 31, 2011.

On October 31, 2011, Isaiah Industries Recorded Its Semi-Annual Bond