Chieh, Inc. issued a $300,000, four-year, 8% note at face value to Cedar Bank on January 1,

Question:

Chieh, Inc. issued a $300,000, four-year, 8% note at to Cedar Bank on January 1, 2011, and received $300,000 cash. The note requires annual interest payments each December 31. Prepare Chieh’s journal entries to record
(a) The note issuance and
(b) The December 31 interest payment.
Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...