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On January 1, 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

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jepessoa

Answer:

$82,500

Explanation:

the journal entry to record the bond issuance

Dr Cash 1,650,000

    Cr Bonds payable 1,650,000

bonds sold at par

Every 6 months it will pay = $1,650,000 x 10% x 1/2 = $82,500

journal entry to record first coupon payment

Dr Interest expense 82,500

    Cr Cash 82,500

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