Brennan's Company experienced an accounting event that was recorded in the company's general journal as indicated below: Which of the following choices accurately reflects how this event would affect Brennan's financial statements.

Question

Brennan's Company experienced an accounting event that was recorded in the company's general journal as indicated below:  Which of the following choices accurately reflects how this event would affect Brennan's financial statements.

Quizplus · Accepted Answer

The journal entry increases interest expense, which decreases net income an equity, decreases the contra-liability discount on bonds payable, which increases liabilities, and decreases assets (cash). It is reported as a cash outflow for operating activities.

Brennan's Company Experienced an Accounting Event That Was Recorded in the Company's