illustration entries for investment in bonds at par

Investment in Bonds Payable at Par
Illustrative Entries

1-1-X3	Investment in Bonds	5,000
	Cash		5,000
	To record the purchase of five $1,000, 5%, 3-year bonds at par -- interest payable semiannually

6-30-X3	Cash	125
	Interest Income		125
	To record the receipt of an interest payment ($5,000 par X .05 interest X 6/12 months)

12-31-X5	Cash	5,000
	Investment in Bonds		5,000
	To record the redemption of bond investment at maturity.