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.

What will be an ideal response?

(a) $800,000 ($20,000,000 × 8% × ½)

(b)

(c) $1,333,333 ($800,000 from part a + $533,333 from part b) (rounded)

(d) Bonds payable $20,000,000
Bond interest payable $533,333

(e)