You issue a 4 year bond with a face value of $50,000 The coupon rate for the bond (also know as the stated rate) is 4% The market rate of the bond is 3%. (Sometimes we say "the bond will Yield 3%") The interest payments are made annually/ Factor total 1. Determine the issue price of the bond Cash Flows Amount Single Payment Interest Payments Total Prepare the journal entry for the issuance of the bond Account Dr Cr B 4. 5 6 7 8 2. Create an amortization table for the bond using the effective interest method. 9 Journal Entry Balance Sheet Amortization Premium interest of Premium Bonds or Book 20 year Payment Expense or Discount Payable Discount Value 21 0 22 1 23 2 24 3 25 4 26 3. Prepare the journal entry for the 3rd year interest payment. 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Prepare the journal entry for the final interest payment and repayment of the face value