At maturity, you debit the bonds payable account and credit the cash account for the face value of the bonds. Bond Issue Costs You must perform a second set of amortizations when you issue the bond.

The actual cash interest paid was only $5,000 -- the coupon multiplied by the bond's face value. However, interest expense also includes the $558.39 of amortized discount in the first six months.

Solve for the present value. You should find that the present value is $108,110.90. Thus, the bonds were sold at a premium of $8,110.90 ($108,110.90 in proceeds minus $100,000 in face value).