Bonds Issued at Par Value (stated rate = market rate)

On January 1, 2020, REYLO issues $100,000 in bonds having a stated rate of 8% annually. The bonds mature in 5 years, and interest is paid annually. The market rate is 8% annually.

Calculate the annual cash interest payment amount:

Calculate the present value of the bond:

Record the journal entry for the bond issuance

1/1/20

Record the first interest cash payment (which will be the same every year for 5 years)

12/31

Record the maturity of the bond (bond repayment)

12/31/24