175. Bonds issued at par - basic concepts
On April 1, Year 1, Olsen Products, Inc. issued at par $25 million of 10%, 10-year bonds payable. Interest is payable semiannually each April 1 and October 1.
(a) What is the amount of cash paid to bondholders for interest during year 1?
$_______________
(b) Give the adjusting entry necessary at December 31, Year 1 (if any), regarding this
bond issue.
(c) Interest expense on this bond issue reported in Olsen Products' Year 1 income statement is:
$_______________
(d) With respect to this bond issue, Olsen Products' balance sheet at December 31, Year 1, includes bonds payable of $__________________ and interest payable of $_______________ (indicate $0 or "none" if the item is not reported.
(e) Give the journal entry made by Olsen Products on April 1, Year 2, to record the semiannual payment of interest to bondholders.
176. Bonds issued at par - basic concepts
On March 1, Year 1, Hubbard Co. issued at a price of 100 $20 million of 8%, 25-year bonds payable. Interest is payable semiannually each March 1 and September 1.
(a) What is the amount of cash paid to bondholders for interest during year 1?
$_____________
(b) Give the adjusting entry necessary at December 31, year 1 (if any), regarding this bond issue.
(c) Interest expense on this bond issue reported in Hubbard's Year 1 income statement is:
$_______________
(d) With respect to this bond issue, Hubbard 's balance sheet at December 31, Year 1, includes bonds payable of $_______________ and interest payable of $_______________. (indicate $0 or "none" if the item is not reported.)
(e) Give the journal entry made by Hubbard on March 1, Year 2, to record the semiannual payment of interest to bondholders.