The accounts for the bonds on the books of the corporation issuing the bonds are:

Question

Quizplus · Accepted Answer

The best choice is B because when a corporation issues bonds, it incurs a liability that is recorded as "bonds payable" on its books. Interest on the bonds is recorded as an expense, so the second account is "interest expense." Therefore, the correct accounts for the bonds on the books of the corporation issuing the bonds are "bonds payable" and "interest expense."

The Accounts for the Bonds on the Books of the Corporation