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Exercise 10-3 (Static) Recording bond issuance and interest LO P1 On January 1, Boston Enterprises issues bonds that have a $3,400,000 par value, mature in
Exercise 10-3 (Static) Recording bond issuance and interest LO P1
On January 1, Boston Enterprises issues bonds that have a $3,400,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par.
- How much interest will the issuer pay (in cash) to the bondholders every six months?
- Prepare journal entries to record (a) the issuance of bonds on January 1, (b) the first interest payment on June 30, and (c) the second interest payment on December 31.
- Prepare the journal entry for issuance assuming the bonds are issued at (a) 98 and (b) 102.
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