On January 1, 2017, Boston Enterprises issues bonds that have a $2,100,000 par value, mature in 20 years, and pay 7% 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? 2. Prepare journal entries to record (a) the issuance of bonds on January 1, 2017; (b) the first interest payment on June 30, 2017; and (c) the second interest payment on December 31, 2017. 3. Prepare the journal entry for issuance assuming the bonds are issued at (a) 98 and (b) 102.

Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2017 follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31, 2017, follow Additional Information Items a. An analysis of WTI's insurance policies shows that $2,400 of coverage has expired b. An inventory count shows that teaching supplies costing $2,800 are available at year-end 2017. c. Annual depreciation on the equipment is $13,200 d. Annual depreciation on the professional library is $7,200 e. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,500, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2018 f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,000 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.) g.VTI's two employees are paid weekly. As of the end of the year, two days, salaries have accrued at the rate of $100 per day for each employee h. The balance in the Prepaid Rent account represents rent for December WELLS TECHNICAL INSTITUTE adjusted Trial Balance Un December 31, 2017 Debit $ 34,000 Credit Cash Accounts receivable Teaching supplies 8,000 Prepaid rent Professional library Accumulated depreciation-Professional 1ibrary Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned training fees Common stock Retained earnings Dividends Tuition fees earned Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 3,000 35,000 $ 10,000 80,000 15,000 26,000 12,500 10,000 80,000 50,000 123,900 40,000 50,000 33,000 6,000 6,400 $ 317,400 $317,400 Journal entry worksheet An analysis of WTI's insurance policies shows that $2,400 of coverage has expired. Note: Enter debits before credits. Transaction General Journal Debit Credit a. Record entry Clear entry View general journal Journal entry worksheet 4 7 An inventory count shows that teaching supplies costing $2,800 are available at year-end 2017. Note: Enter debits before credits. Debit Transaction General Journal Credit b. Record entry Clear entry View general journal Journal entry worksheet Annual depreciation on the equipment is $13,200. Note: Enter debits before credits. Debit Transaction General Journal Credit C. Clear entry Record entry View general journal Journal entry worksheet 4 7 Annual depreciation on the professional library is $7,200 Note: Enter debits before credits. Debit Transaction General Journal Credit d. Record entry Clear entry View general journal Journal entry worksheet 4 7 On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,500, and the client paid the first five months' fees in advance. When the cash was received, Fees account was credited. The fee for the the Unearned Training Note: Enter debits before credits. Transaction General Journal Debit Credit e. Record entry Clear entry View general journal Journal entry worksheet 2 4 On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,000 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, Note: Enter debits before credits. Transaction General Journal Debit Credit Record entry Clear entry View general journal Journal entry worksheet 4 7 WTI's two employees are paid weekly. As of the end of the year, two days salaries have accrued at the rate of $100 per day for each employee Note: Enter debits before credits. Transaction General Journal Debit Credit g. Clear entry Record entry View general journal Journal entry worksheet The balance in the Prepaid Rent account represents rent for December Note: Enter debits before credits. Transaction General Journal Debit Credit h. Record entry Clear entry View general journal