At the time a bond was sold at face value the entire amount of interest was recorded as an expense and a liability.This error would cause:

Question

Quizplus · Accepted Answer

Recording the entire amount of interest as an expense and a liability when a bond is sold at face value does not affect the period end assets or cause the period's net income or liabilities to be misstated in the context provided. The error pertains to the timing of interest expense recognition, but without more context on the accounting treatment or period in question, none of the given impacts directly follow from the error described.

At the Time a Bond Was Sold at Face Value