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On January 1, Boston Enterprises issues bonds that have a $1,750,000 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) 97 and (b) 103. 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) 97 and (b) 103. View transaction list Journal entry worksheet < 1 Record the issue of bonds at 97. 2 Note: Enter debits before credits. Date January 01 Record entry General Journal Cash ....... Discount on bonds payable Bonds payable Clear entry Debit 1,697,500 Credit 1,750,000 View general journal > < Prev 2 of 10 Next

On January 1, Boston Enterprises issues bonds that have a $1,750,000 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) 97 and (b) 103. 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) 97 and (b) 103. View transaction list Journal entry worksheet < 1 Record the issue of bonds at 97. 2 Note: Enter debits before credits. Date January 01 Record entry General Journal Cash ....... Discount on bonds payable Bonds payable Clear entry Debit 1,697,500 Credit 1,750,000 View general journal > < Prev 2 of 10 Next

FINANCIAL ACCOUNTING
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, Boston Enterprises issues bonds that have a $1,750,000 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) 97 and (b) 103. 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) 97 and (b) 103. View transaction list Journal entry worksheet 1 Record the issue of bonds at 97. 2 Note: Enter debits before credits. Date January 01 Record entry General Journal Cash Discount on bonds payable Bonds payable Clear entry Debit 1,697,500 Credit 1,750,000 View general journal < Prev 2 of 10 T 4 Next >
Transcribed Image Text:On January 1, Boston Enterprises issues bonds that have a $1,750,000 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) 97 and (b) 103. 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) 97 and (b) 103. View transaction list Journal entry worksheet 1 Record the issue of bonds at 97. 2 Note: Enter debits before credits. Date January 01 Record entry General Journal Cash Discount on bonds payable Bonds payable Clear entry Debit 1,697,500 Credit 1,750,000 View general journal < Prev 2 of 10 T 4 Next >
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