On January 1, 2013, Boston Enterprises issues bonds that have a $1,750,000 par value, mature in 20 years, and pay 10% interest semiannually on June 30 and December 31. The bonds are sold at par.
1. How much interest will Boston pay (in cash) to the bondholders every six months?
(Par (maturity) Value)) x (Semianual Rate) = Semiannual Cash Interest Payment
2. Prepare journal entries for the following.
a) The issuance of bonds on january 1, 2013. (record the issue of bonds at par on January 1, 2013.
b) The first interest payment on June 30, 2013. (Do not round intermediate calculations)
c) The second interest payment on December 31, 2013. (Do not round intermediate calculations)
3. Prepare the journal entry for the issuance of bonds assuming.
a) The bonds are issued at 96. (Record the issue of bonds with a par value of $1,500,000 at 96 cash on January 1, 2013).
b) The bonds are issued at 104. (Record the issue of bonds with a par value of $1,500,000 at 104 cash on January 1, 2013).
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On January 1, 2013, Boston Enterprises issues bonds that have a $1,750,000 par value, mature in 20 y...
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