On January 1, 2008, Boston Enterprises issues bonds that have a$3,400,000 par value, mature in 20 years, and pay 9% interestsemiannually on June 30 and December 31. The bonds are sold atpar.
1.How much interest will Boston pay (in cash) to the bondholdersevery six months?
2.Prepare journal entries to record (a) the issuance of bonds onJanuary 1, 2008; (b) the first interest payment on June 30, 2008;and (c) the second interest payment on December 31, 2008.
3.Prepare the journal entry for issuance assuming the bonds areissued at (a) 98 and (b) 102.