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Example #3, On January 1, 2019 a company issues 100 bonds, each for $1,000, for par, as the interest rate on the bond (stated/coupon rate)
Example #3, On January 1, 2019 a company issues 100 bonds, each for $1,000, for par, as the interest rate on the bond (stated/coupon rate) is 4% and the market rate is also 4%. They then used this cash to purchase an automobile for $100,000 cash. The bond is to be paid in at the end of THREE years (December 31, 2021).
- PREPARE THE JOURNAL ENTRIES FOR 2019:
| Date | Account Name | Debit | Credit |
| 1/1/2019 |
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| 12/31/2019 |
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- PREPARE THE JOURNAL ENTRIES FOR 2020:
| Date | Account Name | Debit | Credit |
| 12/31/2020 |
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- PREPARE THE JOURNAL ENTRIES FOR 2021:
| Date | Account Name | Debit | Credit |
| 12/31/2021 |
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