egg Study Guided S elezto.mheducation.com/hm.tpx ::: Apps BC Hornel Brooklyn Col
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egg Study Guided S elezto.mheducation.com/hm.tpx ::: Apps BC Hornel Brooklyn Coll AOL Mail (23) PupilPath Dayforce HCM D cic consumer Servic Mexican Pulled Pork 9 On January 1, 2013, 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 Boston pay (in cash) to the bondholders every six months? Par (maturity) Value Semia nnualSemiannual Cash Interest Payment Rate : 2, Prepare iournal entries for the follawingExplanation / Answer
Answer 1:
Par (maturity) Value * Semiannual Rate = Semiannual Cash Interest Payment
$1,650,000 * (10%*1/2) = Semiannual Cash Interest Payment
$1,650,000 * 5% = Semiannaul Cash Interest Payment
$82,500 = Semiannual Cash Interest Payment
Answer 2:
(a) Journal Entry for issue of bond
Date
General Journal
Debit
Credit
Jan 01, 2013
Cash
Bonds Payable
1,650,000
1,650,000
(b) Journal Entry for First Interest payment
Date
General Journal
Debit
Credit
June 30, 2013
Bond Interest Payable
Cash
82,500
82,500
(c) Journal Entry for Second Interest payment
Date
General Journal
Debit
Credit
Dec 31, 2013
Bond Interest Payable
Cash
82,500
82,500
Answer 3:
(a) Journal Entry
Date
General Journal
Debit
Credit
Jan 01, 2013
Cash
Discount on Bonds Payable
Bonds Payable
1,567,500
82,500
1,650,000
(b) Journal Entry
Date
General Journal
Debit
Credit
Jan 01, 2013
Cash
Premium on Bonds Payable
Bonds Payable
1,732,500
82,500
1,650,000
Date
General Journal
Debit
Credit
Jan 01, 2013
Cash
Bonds Payable
1,650,000
1,650,000
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