Bonds Issued at Par - Basic Concepts

question 55

Essay

Bonds issued at par - basic concepts
On 1 March, Year 1, Hubbard Co. issued at a price of 100 $20 million of 8%, 25-year bonds payable. Interest is payable semiannually each 1 March and 1 September.
(a) What is the amount of cash paid to bondholders for interest during year 1?
$_____________
(b) Give the adjusting entry necessary at 31 December, 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 statement of financial position at 31 December, 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 1 March, Year 2, to record the semiannual payment of interest to bondholders.

---

Definitions:

Training Needs

Training needs are the identified gaps in knowledge, skills, and abilities among employees that require addressing through specific training programs.

Job Analysis

A systematic process for gathering, documenting, and analyzing information about the content, requirements, and context of jobs to support hiring, training, performance evaluation, and other HR activities.

National Occupational Classification

A systematic classification of occupations in the economy, providing a standardized framework for job definitions, skill requirements, and work attributes.

Uniformity

The state or quality of being the same in terms of appearance, behavior, or structure, often pursued to ensure consistency and standardization.