If a bond's interest period does not coincide with the issuing company's accounting period,an adjusting entry is necessary to recognize bond interest expense accruing since the most recent interest payment.

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An adjusting entry is necessary to ensure that the bond interest expense is recorded in the correct accounting period, regardless of whether it coincides with the interest payment period. This is done to accurately reflect the company's financial position and performance in its financial statements.

If a Bond's Interest Period Does Not Coincide with the Issuing