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

Question

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When interest payments are made on a bond issued at face value, the company recognizes the expense as Bond Interest Expense and reduces its Cash balance. Therefore, the journal entry should be debit Bond Interest Expense and credit Cash. Option B is incorrect because it would increase the Bonds Payable balance instead of reducing it. Option C is incorrect because it debits Cash first, which is inconsistent with the nature of the transaction. Option D is incorrect because it debits Cash first and recognizes the expense incorrectly.

When Interest Payments Are Made on a Bond Issued at Face