Question

1) Johanna Corporation issued $3,000,000 of 8%, 20-year bonds payable at par value on January 1. Interest is payable each June 30 and December 31. (a) Prepare the general journal entry to record the issuance of the bonds on January (b) Prepare the general journal entry to record the first interest payment on June 30. 2) A company issued 9%, 10-year bonds with a par value of $100,000. Interest is paid semiannually. The market interest rate on the issue date was 10%, and the issuer received $95,016 cash for the bonds. Prepare a journal entry to record the issuance of the bond on the first semiannual interest date, what amount of cash should be paid to the holders of these bonds for interest? On January 1, ABC company issued a 12%, 10-year bond with a par value of $100.000. Interest is paid semiannually. The market interest rate on the bond is 11% and the issuer received $103, 769 cash for the bond. Prepare a journal entry to record the issuance of the bond. On the first semiannual interest date, what amount of cash should be paid to the holder of the bond?

Answer 1

Since, multiple questions have been posted, I have answered the first one.

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Question 1:

Part a)

The journal entry to record issuance of bonds on January 1 is prepared as follows:

Date	Account Titles	Debit	Credit
Jan-01	Cash	$3,000,000
	Bonds Payable		$3,000,000
	(To record the issuance of bonds)

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Part b)

The journal entry to record the first interest payment on June 30 is given as below:

Date	Account Titles	Debit	Credit
Jun-30	Bond Interest Expense (3,000,000*8%*1/2)	$120,000
	Cash		$120,000
	(To record the first interest payment)