Question

If bond interest expense is $280,000, bond interest payable decreased by $8,000 and bond discount decreased by $1,000, cash paid for bond interest is:

a) $273,000
b) $287,000
c) $271,000
d) $280,000

Answer 1

CALCULATION OF THE BONDS PAID IN CASH
PARTICULARS	AMOUNT
Bond interest Expneses =	$                 2,80,000
Less: Bond Discount decreased	$                       1,000
Add: Payable Decreased	$                       8,000
Total	$                 2,87,000
Answer = Option b = $ 287,000
1) Bond discount decreased means discount amortize the bond interest and charged
to interest expenses from this $ 1000
2) Bonds payable decreased means paid the bond for last period pending