Enviro Company issues 8%, 10-year bonds with a par value of $250,000 and semiannual interest payments. On

Question:

Enviro Company issues 8%, 10-year bonds with a of $250,000 and semiannual interest payments. On the issue date, the annual market rate for these bonds is 10%, which implies a selling price of 87½. Prepare the journal entries for the issuance of the bonds. Assume the bonds are issued for cash on January 1, 2017.
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...