Issuing Bonds at a Face Amount On January 1, the first day of the fiscal year, Designer Fabric Inc. issues a $800,000, 10%, 10-year bond that pays semiannual interest of $40,000 $800,000 x 10% x 12 year), receiving cash of $800,000. (a) Journalize the entry to record the issuance of the bonds. Cash Bonds Payable Feedback Check My Work Interest payments are always recorded as Interest Expense Learning Objective 2. (b) Journalize the entry to record the first interest payment on June 30. Interest Expense Cash Feedback Check My Work Interest payments are always recorded as Interest Expense Learning Objective 2. (c) Journalize the entry to record the payment of the principal on the maturity date. Bonds Payable Cash Feedback Check My Work Interest payments are always recorded as Interest Expense eBook Show Me How Calculator Issuing Bonds at a Discount On the first day of the fiscal year, a company issues a $8,100,000, 9%, 10-year bond that pays semiannual interest of $364,500 ($8,100,000 x 9% x 12), receiving cash of $7,132,021. Journalize the bond issuance. If an amount box does not require an entry, leave it blank. Cash Discount on Bonds Payable Bonds Payable Feedback Check My Work Bonds Payable is always recorded at face value. Any difference in issue price is reflected in a premium or discount account. Learning Objective 2