When a bond is sold at face value, or issued at par, the selling price equals the principal of the bond.  Also, the yield, or the return, on the bond equals the interest rate.  To calculate the annual interest, you need to know the coupon rate and the price of the bond.For example, Company QRS issues 5-year, $500,000, 10 percent bonds, with interest paid semi-annually.  The market interest rate is 10 percent, so the bond is issued at par.

 Interest is paid semi-annually, so the coupon rate per period is 5 percent (10 percent / 2) and the market interest rate per period is 5 percent (10 percent / 2).  

 The number of periods is 10 (2 periods per year * 5 years).
  Multiply the face value of the bond by the coupon rate per period.  This tells you the interest payment the investors receive each period.

 Using the above example, the face value of the bond is $500,000 and the coupon rate per period is 5 percent.

 $500,000∗.05=$25,000{\displaystyle \$500,000*.05=\$25,000}

 The interest payment to investors each period is $25,000


,  Because you issued the bond at par, the journal entries are straightforward.  You don’t need to record any amortization of discounts or premiums.  For each period, record a debit of $25,000 to Interest Expense.  Also, record a credit of $25,000 to Cash.
Gather the information.
Calculate the interest payment for each period.
Record the total interest expense.
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