Moonlight Drive-Ins Ltd. borrowed money by issuing $2,000,000 of 4% bonds payable at 97.5 on July 1,

Question:

Moonlight Drive-Ins Ltd. borrowed money by issuing $2,000,000 of 4% bonds payable at 97.5 on July 1, 2014. Te bonds are 10-year bonds and pay interest each January 1 and July 1.
1. How much cash did Moonlight receive when it issued the bonds payable? Journalize this transaction.
2. How much must Moonlight pay back at When is the date?
3. How much cash interest will Moonlight pay each six months?
4. How much interest expense will Moonlight report each six months? Assume the straight-line amortization method. Journalize the entries for accrual of interest on December 31, 2014, and payment of interest on January 1, 2015.

Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...