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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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?
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