Woodwick Company issues 6 five-year bonds
| Woodwick Company issues 6%, five-year bonds, on December 31, 2012, with a par value of $102,000 and semiannual interest payments. |
| Semiannual Period-End | Unamortized Premium | Carrying Value | ||||||
| (0) | 12/31/2012 | $ | 8,151 | $ | 110,151 | |||
| (1) | 6/30/2013 | 7,336 | 109,336 | |||||
| (2) | 12/31/2013 | 6,521 | 108,521 | |||||
| Use the above straight-line bond amortization table and prepare journal entries for the following. |
| (a) | The issuance of bonds on December 31, 2012. |
| (b) | The first interest payment on June 30, 2013. |
| (c) | The second interest payment on December 31, 2013. |
| Duval Co. issues four-year bonds with a $115,000 par value on June 1, 2013, at a price of $110,888. The annual contract rate is 7%, and interest is paid semiannually on November 30 and May 31. |
2.value:
6.00 points
| 2. |
Prepare journal entries to record the first interest payment, accrued interest as of December 31, 2013 and to record the second interest payment. Assume no reversing entries have been prepared.(Round your answers to the nearest dollar amount.)
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| On January 1, 2013, Boston Enterprises issues bonds that have a $2,000,000 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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