Bond Issuance On January 1, Dallas Enterprises issues bonds that have a $2,250,000 par value, mature in 30 years, and pay 8% interest semiannually on June 30 and December 31. The bonds are sold at par. 2,250,000 30 8% 1. How much interest will Boston pay (in cash) to the bondholders every six months? Par (maturity) Value 2 3 Par Term Rate 2. 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. No General Journal 1 No 1 X 2 Date 1-Jan 30-Jun 31-Dec Semiannual Rate 3. Prepare the journal entry for issuance assuming the bonds are issued at (a) 97 and (b) 105. Date General Journal Debit 1-Jan 1-Jan Semiannual Cash Interest Payment Debit Credit Credit
Bond Issuance On January 1, Dallas Enterprises issues bonds that have a $2,250,000 par value, mature in 30 years, and pay 8% interest semiannually on June 30 and December 31. The bonds are sold at par. 2,250,000 30 8% 1. How much interest will Boston pay (in cash) to the bondholders every six months? Par (maturity) Value 2 3 Par Term Rate 2. 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. No General Journal 1 No 1 X 2 Date 1-Jan 30-Jun 31-Dec Semiannual Rate 3. Prepare the journal entry for issuance assuming the bonds are issued at (a) 97 and (b) 105. Date General Journal Debit 1-Jan 1-Jan Semiannual Cash Interest Payment Debit Credit Credit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Prepare transactions according to the Generally Accepted Accounting Principles.
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Transcribed Image Text:Bond Issuance
On January 1, Dallas Enterprises issues bonds that have a $2,250,000 par value, mature in 30 years, and pay
8% interest semiannually on June 30 and December 31. The bonds are sold at par.
2,250,000
30
8%
1. How much interest will Boston pay (in cash) to the bondholders every six months?
Par (maturity)
Value
No
1
2
3
2. 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.
General Journal
Par
Term
Rate
No
1
X
2
Date
1-Jan
30-Jun
31-Dec
Semiannual Rate
3. Prepare the journal entry for issuance assuming the bonds are issued at (a) 97 and (b) 105.
Date
General Journal
Debit
1-Jan
1-Jan
Semiannual Cash
Interest Payment
Debit
Credit
Credit
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