I'm looking at the ledger entries for the simplest case that's provided, which is a 5 year bond that pays a semiannual 8% coupon and the bond is purchased at a par value of 1000. The entries for the bond investment and bond interest income make sense to me from the perspective of the bond buyer. The cash entries on the ledger seem flipped unless we were looking at it from the perspective of the bond issuer. This example suggests an initial credit to cash of 1000 and then debits of 40 through the remainder of the bond's lifetime. What am I missing here?
Cash accounting for bonds
