Question
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
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.
Complete this question by entering your answers in the tabs below.
How much interest will Boston pay (in cash) to the bondholders every six months?
Par (maturity) Value | Semiannual Rate | Semiannual Cash Interest Payment | ||
x | = |
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.
Journal entry worksheet
Record the issue of bonds at par on January 1, 2017.
Date | General Journal | Debit | Credit |
---|---|---|---|
Jan 01, 2017 | |||
Record the interest payment on June 30, 2017.
Date | General Journal | Debit | Credit |
---|---|---|---|
Jun 30, 2017 | |||
Record the interest payment on December 31, 2017.
Date | General Journal | Debit | Credit |
---|---|---|---|
Dec 31, 2017 | |||
Prepare the journal entry for issuance assuming the bonds are issued at (a) 98 and (b) 102.
Journal entry worksheet
Record the issue of bonds at 98.
Date | General Journal | Debit | Credit |
---|---|---|---|
Jan 01, 2017 | |||
Record the issue of bonds at 102.
Date | General Journal | Debit | Credit |
---|---|---|---|
Jan 01, 2017 | |||
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