How to calculate the interest on issuing bonds?

Bond interest refers to the interest that the fund assets get on a regular basis due to investment in government bonds, local bonds, financial bonds, etc. How to calculate the interest when issuing bonds?

how to calculate the interest on issuing bonds?

the calculation formula of bond interest is: accrued bond interest per period = bond face value × coupon rate; Bond interest = bond face value × coupon rate × time

Bonds are generally issued by the government, financial institutions, enterprises or companies. The sale of corporate bonds is one of the sources of financing for companies or enterprises, which has a raising effect on the operation of enterprises or companies. Enterprises should accrue interest on schedule when issuing bonds, and the accrual basis is the face value of bonds and the coupon rate of bonds. Common bond types are fixed-rate bonds, floating rate notes bonds and discount bonds.

bond interest payment methods in the securities market can generally be divided into two categories, namely, one-time interest payment and installment interest payment. One-time interest payment includes: single interest payment, compound interest payment and discount payment; The method of paying interest in installments is to pay interest in several times within the validity period of the bond, specifically in three ways: annual interest payment, semi-annual interest payment and quarterly interest payment.

accounting entries for issuing bonds

debit: bank deposits

loan: bonds payable-face value (face value of bonds)

bonds payable-interest adjustment (difference)

interest accrued at the end of the period

debit: construction in progress, manufacturing expenses, financial expenses and other subjects

bonds payable-interest adjustment <

repayment of principal and interest at maturity

debit: bonds payable-bonds payable with face value

accrued interest (interest on bonds with one-time repayment of principal and interest)

interest payable (last interest on bonds with interest paid in installments)

loan: bank deposit