The Bryan Company issued $500,000 of 10% face value bonds on January 1, 2007 for $486,000. The

Question:

The Bryan Company issued $500,000 of 10% face value bonds on January 1, 2007 for $486,000. The bonds are due December 31, 2009, and pay interest semiannually on June 30 and December 31. The company uses the straight-line amortization method.

Required

Prepare the journal entries to record the issuance of the bonds and the first two interest payments.

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...