On January 1, 2020, Mayor Company issued 40,000 5 year bonds with a $1,000 par value each The market values the bonds at $30,000 less than the face value of the bonds The stated rate of interest is 6 , and interest is paid annually on December 31 Required Prepare the necessary journal entry on Dece...

Journal Date Account and Explanat ...

On January 1, 2020, Mayor Company issued 40,000 5-year bonds with a $1,000 par value each. The

Question:

On January 1, 2020, Mayor Company issued 40,000 5-year bonds with a $1,000 each. The market values the bonds at $30,000 less than the of the bonds. The stated rate of interest is 6%, and interest is paid annually on December 31.
Required:
Prepare the necessary journal entry on December 31, 2020, assuming the straight-line method is followed.
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... 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,...