On January 1, Murphy, Inc., issues 7 percent, 20-year bonds with a face value of $ 650,000

Question:

On January 1, Murphy, Inc., issues 7 percent, 20-year bonds with a of $ 650,000 at 96. Interest is payable on June 30 and December 31. Journalize the following entries:
a. Issuance of the bonds
b. Payment of semiannual interest on June 30 and December 31
c. Adjusting entry to amortize the discount on December 31, the company’s year end

Face Value
Face value is a financial term used to describe the nominal or dollar value of a security, as stated by its issuer. For stocks, the face value is the original cost of the stock, as listed on the certificate. For bonds, it is the amount paid to the...