Debit Litigation Expense for $300,000 and credit Litigation
Liability for $300,000
Question 11. (TCO D) If bonds are initially sold at a discount and
the straight-line method of amortization is used, interest expense in
the earlier years will
exceed what it would have been had the effective-interest
method of amortization been used.
be less than what it would have been had the effective-interest
method of amortization been used.
be the same as it would have been had the effective-interest
method of amortization been used.
be less than the stated (nominal) rate of interest.
Question 12. (TCO D) If bonds are issued between interest dates, the
entry on the books of the issuing corporation could include a
debit to Interest Payable.
credit to Interest Receivable.
credit to Interest Expense.
credit to Unearned Interest.