On January 1, Boston Enterprises issues bonds that have a $1,650,000 par value, mature in 20 years, and pay 10% interest semiannually on June 30 and December 31. The bonds are sold at par.1. How much interest will the issuer pay (in cash) to the bondholders every six months?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 31.3. Prepare the journal entry for issuance assuming the bonds are issued at (a) 95 and (b) 105.Complete this question by entering your answers in the tabs below.Required 1 | Required 2 | Required 3Prepare 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. **Journal Entry Exercise for Bonds**This activity is designed to help you understand how to prepare journal entries for bond-related transactions. You will focus on three key events:1. **Issuance of Bonds on January 1**2. **First Interest Payment on June 30**3. **Second Interest Payment on December 31**### Instructions#### Step 1: Issuance of Bonds- **Record Requirement:** Issue bonds at par on January 1. **Journal Entry Worksheet** - **Date:** January 01 - **General Journal Entries:** - Include the necessary accounts for debits and credits. Enter debits before credits. #### Step 2: Interest Payments- **First Payment:** Record the first interest payment on June 30.- **Second Payment:** Record the second interest payment on December 31.### Navigation- Use the left and right arrows to switch between the three requirement steps.- Fill out each journal entry accordingly.### Additional Features- **Buttons:** - “**Record entry**” to save your entry. - “**Clear entry**” to reset the worksheet. - “**View general journal**” to view all entries together.### Notes- Please remember to enter debits before credits in the worksheet.

Interest paid is the actual amount of interest which is paid to the bondholders. It is calculated by…

Answered: On January 1, Boston Enterprises issues…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Milan Company issued bonds with a face value of $463,000 on January 1, Year 1. The bonds had a 6 percent stated rate of interest and a six-year term. The bonds were issued at face value. Interest is payable on an annual basis. Required a. What total amount of interest will Milan Company pay in Year 1 if bond interest is paid annually each December 31? b. What total amount of interest will Milan Company pay in Year 1 if bond interest is paid semiannually each June 30 and December 31? (Do not round intermediate calculations.) a. Total amount of interest b. Total amount of interest
On January 1, Topeka Outfitters issued $175,000 of 6%, 3-year bonds when the market rate of interest was 10%. The bonds pay interest semiannually on June 30 and December 31. A. How much are the proceeds that Topeka Outfitters? will receive on the issue date of the bonds? B. Prepare an amortization table for the bond issue. C. If the bonds are retired at the end of Year 2 at 104.5% of the maturity value, how much gain or loss on retirement will be reported?
Problem Tower Inc. issues $40,000, 10%, 10-year bonds at January 1, 2020. Interest is paid semi- annually on June 30 and December 31. On the date of issuance, the bonds sold for 113.5 when the market rate was 8%. 1.) Compute the price of the bonds on their issue date. Round to the whole dollars.
What would be the required journal entry on the date of issuance if a company issues $100,000 five-year, 10% bond for $103,769 and the interest is to be paid semiannually? debit cash, $100,000, and credit bond payable $100,000 debit cash $103,769, and credit bond payable $100,000 and credit premium on bonds payable $3,769 debit bonds payable $103,769 and debit discount on bonds payable $3,769, and credit cash $100,000 debit cash $103,769 and debit discount on bonds payable $3,769, and credit bonds payable $100,000
On January 1, Shanghai Fashions issued $325,000 of 6%, 3-year bonds when the market rate of interest was 10%. The bonds pay interest semiannually on June 30 and December 31. A. How much are the proceeds that Shanghai Fashions Company will receive on the issue date of the bonds? B. Prepare an amortization table for the bond issue. C. If the bonds are retired at the end of Year 2 at 104.5% of the maturity value, how much gain or loss on retirement will be reported?
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1. On January 1, a company issues bonds dated January 1 with a par value of $300,000. The bonds mature in 5 years. The contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The market rate is 8% and the bonds are sold for $312,177. The journal entry to record the issuance of the bond is: Debit Cash $312,177; credit Discount on Bonds Payable $12,177; credit Bonds Payable $300,000. Debit Cash $300,000; debit Premium on Bonds Payable $12,177; credit Bonds Payable $312,177. Debit Bonds Payable $300,000; debit Interest Expense $12,177; credit Cash $312,177. Debit Cash $312,177; credit Premium on Bonds Payable $12,177; credit Bonds Payable $300,000. Debit Cash $312,177; credit Bonds Payable $312,177.
On January 1, Innovative Solutions, Inc., issued $200,000 in bonds at face value. The bonds havea stated interest rate of 6 percent. The bonds mature in 10 years and pay interest once per year onDecember 31.Required:1. Prepare the journal entry to record the bond issuance.2. Prepare the journal entry to record the first interest payment on December 31. Assume nointerest has been accrued earlier in the year.3. Assume the bonds were retired immediately after the first interest payment at a quoted priceof 101. Prepare the journal entry to record the early retirement of the bonds.
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A company issues $90,000 of 6%, 10-year bonds dated January 1 that pay interest semiannually on each June 30 and December 31. If the issuer accepts $85,000 for the bonds, the issuer will record the sale with a (debit/credit) credit to Discount on Bonds Payable in the amount of $
On January 1, when the market interest rate was 9 percent, Seton Corporation completed a$200,000, 8 percent bond issue for $187,163. The bonds pay interest each December 31 andmature in 10 years. Seton amortizes the bond discount using the straight-line method.Required:1. Prepare the journal entry to record the bond issuance.2. Prepare the journal entry to record the first interest payment on December 31.3. Prepare a bond discount amortization schedule for these bonds. Round calculations to thenearest dollar.
On January 1, Topeka Outfitters issued $175,000 of 6%, 3-year bonds when the market rate of interest was 10%. The bonds pay interest semiannually on June 30 and December 31. How much are the proceeds that Topeka Outfitters? will receive on the issue date of the bonds?

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