Coldwell, Inc. issued a $100,000, 4-year, 10% notes at face value to Flint Hills Bank on January

Question:

Coldwell, Inc. issued a $100,000, 4-year, 10% notes at face value to Flint Hills Bank on January 1, 2011, and received $100,000 cash. The note requires annual interest payments each December 31. Prepare Coldwell’s journal entries to record

(a) The issuance of the note 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...