Which of the following statements about bonds and notes is not correct? The jour

Question

Which of the following statements about bonds and notes is not correct? The journal entry that records interest owed on bonds and notes includes a debit to interest Expense and a credit to interest Payable. Bonds Payable and Notes Payable are always classified as noncurrent liability accounts. A company can borrow the funds necessary to finance its activities using bonds or promissory notes. Borrowings using bonds or notes are initially recorded with a journal entry that debts Cash and credits the relevant liability account.

Explanation / Answer

The correct option is

B. Bonds Payable and Notes Payable are always classified as Non Current Liability Account.

The bonds Payable and Notes payable that mature within one year are classified as Current Liabilities else will be classified as non current Liabilities.

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