[titoav15]

Quick question… So I am a little confused as to the right way of booking the Bond issuance between interest dates. I understand all the applications just one account throws me off.

Dr.Cash

Dr.Cash Interest

Cr. Premium

Cr. Bond Payable

Cr. Interest Payable <—- So I thought that this is the normal way booking interest in advance

However I also seen this in Ninja Notes…

Dr.Cash

Dr.Cash Interest

Cr. Premium

Cr. Bond Payable

Cr. Interest Expense <— So my question is what account is the right one to credit? Are they both right or am I missing something?

AUD - PASS

FAR - PASS

REG - PASS

BEC - PASS

BEC: 5/21/14 82! PASSED HALF WAY THERE!
FAR: 4/2/15 80! Almost there!
AUD: 69, 74, 4/3/14 81! PASSED
REG: TBD

[musicamor]

The second option above is correct. Bond issuance between interest dates would imply a recognition of a portion of interest incurred – not interest payable.

Texas CPA - licensed in 2012!!!

[Author]

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