issues 5 year 10% coupon bonds for cash and receives 93% of the face value of...
issues 5 year 10% coupon bonds for cash and receives 93% of the face value of the bonds. Each bond has a $1,000 face value. The bonds pay interest once per year beginning December 31st 2019. The market rate of interest for these bonds (yield) was 12%., quantity of the bond is 298. the price is 930. what's the coupon payment on the bond and whats the journal entry for the bond interest payment?
Homework Answers
Solution:
Coupon payment on bond = 298*$1,000*10% = $29,800
| Journal entries | |||
| Event | Particulars | Debit | Credit |
| 1 | Interest expense Dr | $33,972.00 | |
| To Cash | $29,800.00 | ||
| To Discount on bond payable (298*$70/5) | $4,172.00 | ||
| (To record interest payment on bond and discount amortization) | |||
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