The Company issues $1,000,000 5-year bonds with a contract rate of 10% with semi-annual interest payments when the market rate is 8%. Using Present Value tables we determine that an issue price of $1,081,105 will effectively make our bonds equal to bonds that pay the market 8%.

The journal entry to record issuing the bond is:

GENERAL JOURNAL						Page
	Date		Description	Post	Debit	Credit
1							1
2							2
3							3