Sylvestor Company issues 10%, five-year bonds, on December 31, 2016, with a par value of $100,000 and

Question:

Sylvestor Company issues 10%, five-year bonds, on December 31, 2016, with a par value of $100,000 and semiannual interest payments. Use the following bond amortization table and prepare journal entries to record

(a) the issuance of bonds on December 31, 2016;

(b) the first interest payment on June 30, 2017; and

Semiannual Period-End Unamortized Discount Carrying Value

(0) 12/31/2016....................................$7,360..............................$92,640

(1) 6/30/2017.......................................6,624................................93,376

(2) 12/31/2017......................................5,888................................94,112

Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...