Question

No matter whether bonds are retired at maturity or before maturity, the journal entry to record the retirement of bonds always includes a debit to Bonds Payable and a credit to Cash.

A. True
B. False

Answer 1

The journal entry to record the retirement of bonds usually includes a debit to Bonds Payable and a credit to Cash.

Step-by-step explanation:

In financial accounting, when bonds are retired, whether at maturity or before maturity, the journal entry to record the retirement of bonds typically includes a debit to Bonds Payable and a credit to Cash. This is because the company is paying off the bonds and reducing its liability (Bonds Payable) while using its cash to make the payment.