In 2012, when this interest was paid to the bondholders, the following entry would be made: Dr.
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In 2012, when this interest was paid to the bondholders, the following entry would be made:
Dr. . . . . . . . . . . . . . . . . . . 3,000 Cr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 As the above entries indicate, on the balance sheet, at any given time, the liability for the principal payment is the total face value of the bond, but the interest liability is the [amount of interest expense incurred but unpaid / total amount of interest].
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