Best Answer 1 Prepare the journal entry to record the issuance of the bonds on July 1 2010 Present Value of the face value of the bonds 496969 Present Value of the payments 50000 419192 496969 419192 916161 Issue price Dr Cash 916161 Dr Discount on Bonds Payable 83839 Cr Bonds Payable 1000000 2 Prepare the adjusting entry on Dec 1 2010 to accrue interest expense Using the straightline method of amortization 83839 12 6987 Dr Interest Expense 56987 Cr Interest Payable 50000 Cr Discount on B