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.
1. How much interests will Boston pay (in cash) to the bondholders every six months?
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.
(c) The second interest payment on December 31, 2013.
3. Prepare the journal entry for issuance of bonds assuming.
(a) The bonds are issued at 98.
(b) The bonds are issued at 102.