Bonds

On January 1, 2011, XYZ Corporation issued and sold a $1,000,000 bond with 6% coupon and market rate per year, compounded annually. The maturity is 4 years.

a)What is the face or par value of this bond?

b)Calculate the coupon payments of this bond.

c)Give the accounting entry for the issuance of the bond.

a)Give the accounting entries for bond coupon and par value payment(s) over the life of the bond (i.e., at the end of the first, second, third and fourth year at the bond maturity date).