Trace the coasters with the pencil directly onto the paper and cut just inside the line.
Add a medium layer of Mod Podge to the coaster and then lay the paper down and smooth. Keep smoothing until all of the bubbles are removed. Let dry for 15 - 20 minutes.
Once the coasters are dry, trim any excess paper around the edges with the craft knife or scissors.
Paint a coat of Mod Podge over the top of the paper. Let dry and give another coat. Let dry.
To finish your coasters, add a brush-on waterproof sealer. You can also use Engine Enamel spray. Let dry 24 hours before using.