Problemon january 1 2013 boston enterprises issues bonds, Ask an Expert

Accounting

Problem:

On January 1, 2013, Boston Enterprises issues bonds that have a $3,400,000 par value, mature in 20 years, and pay 9% interest semiannually on June 30 and December 31. The bonds are sold at par.

Required:

Question 1: How much interest will Boston pay (in cash) to the bondholders every six months?

Question 2: Prepare journal entries for the following.

(a) The issuance of bonds on January 1, 2013.

(b) The first interest payment on June 30, 2013.

Question 3: Prepare the journal entry for issuance of bonds assuming.

(a) The bonds are issued at 98.

(b) The bonds are issued at 102.

Note: Please describe comprehensively and provide step by step solution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91163585

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