00:01
On january 1st, renewable energy issues bonds that have a $20 ,000 par value, mature in eight years and pay 12 % interest semi -annually on june 30th and december 31st.
00:12
Number one, prepare the journal entry for issuance, assuming the bonds are issued at a99 and b, 103.
00:21
And how much interest does the company pay in cash to its bondholders every six months if the bonds are sold at par? so first for part one, we are going to debit cash, and this is when they're, so this is part 1a, we're going to debit cash $19 ,800.
00:52
This is calculated by taking the $20 ,000 times 99%, which is 20 ,000 times 0 .99, and we get 19 ,800.
01:13
We are going to debit discount on bonds payable $200.
01:28
This is calculated by taking $20 ,000, minusing this right here, this $19 ,800, and we get $200.
01:41
And we are going to credit bonds payable the $20 ,000...