Asked by Hannah Crenshaw on Jun 10, 2024
Verified
Bond interest paid by a corporation is an expense,whereas dividends paid are not an expense of the corporation.
Bond Interest
The regular payments made to bondholders as compensation for the investment, typically expressed as a percentage of the principal.
Dividends
Disbursements issued to shareholders by a company, typically sourced from the firm's earnings.
Corporation
A legal entity that is separate and distinct from its owners, who are shareholders. The corporation itself can own assets, borrow money, sue or be sued.
- Comprehending the accounting processes for bond issuance, encompassing discounts, premiums, and the carrying value.
Verified Answer
JB
Jovan BerryJun 14, 2024
Final Answer :
True
Explanation :
Bond interest paid is considered an expense because it is a payment made by the corporation to borrow money. Dividends, on the other hand, are payments made to shareholders from the corporation's profits and are not considered an expense. Instead, they are viewed as a distribution of those profits to the shareholders.
Learning Objectives
- Comprehending the accounting processes for bond issuance, encompassing discounts, premiums, and the carrying value.