On January 1, Boston Enterprises issues bonds that have a $1,850,000 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 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. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry for issuance assuming the bonds are issued at (a) 95 and (b) 105. No Date 1 January 01 Cash Bonds payable General Journal > 0 Debit 64,750x Credit 64.750 2 January 01 Cash Bonds payable ° 105,000 95.000 Premium on bonds payable 10,000 < Required Z Required 3 >

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Am. 202.

On January 1, Boston Enterprises issues bonds that have a $1,850,000 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 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.
Answer is not complete.
Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Required 3
Prepare the journal entry for issuance assuming the bonds are issued at (a) 95 and (b) 105.
No
Date
1
January 01
Cash
Bonds payable
General Journal
> 0
Debit
64,750x
Credit
64.750
2
January 01
Cash
Bonds payable
°
105,000
95.000
Premium on bonds payable
10,000
< Required Z
Required 3 >
Transcribed Image Text:On January 1, Boston Enterprises issues bonds that have a $1,850,000 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 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. Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Prepare the journal entry for issuance assuming the bonds are issued at (a) 95 and (b) 105. No Date 1 January 01 Cash Bonds payable General Journal > 0 Debit 64,750x Credit 64.750 2 January 01 Cash Bonds payable ° 105,000 95.000 Premium on bonds payable 10,000 < Required Z Required 3 >
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