So in an event that a 0% bond with an effective rate at 6% is issued and won't be paid off in a 10 years, how would I report this model on a journal entry? I know how to report the bond issuance in a journal entry, but suppose I want to report in a following year, would I record debit cash for the PV of the bond for the end of that following year and Debit that same amount for bonds payable?

Answer rating: 100% (QA)

To start off our lesson please know that since the nominal interest rate is 0 there will be no inter... View the full answer