The entry to record the adjustment for accrued bond interest includes

Question

Quizplus · Accepted Answer

The adjustment for accrued bond interest requires a debit to Bond Interest Expense to record the expense that has been incurred but not yet paid, and a credit to Bond Interest Payable to recognize the obligation to pay the interest. Therefore, option B is the correct choice. Option A is incorrect because it records a cash payment, which is not required for the adjustment. Option C is incorrect because it records the opposite of the required entry, by debiting Bond Interest Payable and crediting Bond Interest Expense. Option D is incorrect because it records a reduction in the liability for Bonds Payable, which is not the purpose of the adjustment.

The Entry to Record the Adjustment for Accrued Bond Interest