Issuing Bonds at Face Amount The first day of the fiscal year, a company issues a $1,000,000, 10%, 10-year bond that pays semiannual interest of $50,000 ($1,000,000 x 10% x year), receiving cash of $1,000,000. a. Journalize the entry to record the issuance of the bonds. If an amount box does not require an entry, leave it blank. Cash Bonds Payable 1,000,000 1,000,000 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. b. Journalize the entry to record the first interest payment. If an amount box does not require an entry, leave it blank. Interest Expense Cash Feedback Check My Work The interest payment is calculated using the following formula: Principle x Interest Rate x Time. c. Journalize the entry to record the payment of the principal on the maturity date. If an amount box does not require an entry, leave it blank. Bonds Payable 1,000,000 Cash 1,000,000