Interest paid on a bond is classified as an other expense, separate from operating expenses, cost of goods sold, or revenues.
Interest paid on a bond is classified as a other expense. When a company issues bonds, it borrows funds from investors, and in return, promises to pay back the principal amount on a specified maturity date along with regular interest payments, commonly known as coupons. These interest payments are an expense to the company but are not related to the core operations of the business, hence they are not considered an operating expense. They also do not relate to the cost associated with producing goods, thus they are not classified as the cost of goods sold. Bond interest is also not a revenue, as it is a cost incurred by the issuing entity.