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On January 1, 2016, Boston Enterprises issues bonds that have a $2,750,000 par value, mature in 35 years, and pay 6% interest semiannually on June
On January 1, 2016, Boston Enterprises issues bonds that have a $2,750,000 par value, mature in 35 years, and pay 6% interest semiannually on June 30 and December 31. The bonds are sold at par.
A. How much interest will Boston pay (in cash) to the bond holders every 6 months?
B. Prepare the journal entry to record the issuance of bonds on January 1, 2016.
C. Prepare the journal entry to record the first interest payment on June 30, 2016.
D. Prepare the journal entry to record the second interest payment on December 31, 2016.
E. Prepare the journal entry to record the issuance of bonds on January 1, 2016 assuming they are issued at 97.
F. Prepare the journal entry to record the issuance of bonds on January 1, 2016 assuming they are issued at 107.
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