On January 1, Boston Enterprises issues bonds that have a $1,850,000 par value, mature in 20 years, and pay 7% interest semiannuallyon 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) thesecond 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 1Required 2Required 3Prepare the journal entry for issuance assuming the bonds are issued at (a) 95 and (b) 105.No1DateJanuary 01CashBonds payableGeneral JournalDebitCredit64,75064,7502January 01CashBonds payable105,00095,000 ×Premium on bonds payable10,000x< Required 2Required 3 >

Step 1:Answer 1.Computation of the amount of interest payment every six months:Par (maturity) Value…

Answered: On January 1, Boston Enterprises issues…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 5PA: Volunteer Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July...

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