Company X issues 100 bonds totaling $100,000 on January 1st, 2022 at 3% interest when the market rate is 4%. The bond term is 10 years. The interest will be paid on January 1, 2023. The adjusting journal entry to recognize the interest on December 31st will include: 1. Debit to Interest Expense for $3,676 2. Debit to Bonds for $3,000. 3. Credit to Cash for $3,676. 4. Debit to Discount for $3000. 01 02 0 3 04

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…