Answer:
1. Par Value = $3,400,000
Semi-annual coupon rate = 9%/2 = 4.5%
Semi annual coupon = Semiannual rate * Par value = 4.50$*$3,400,000
= $153,000
So, the interest that Boston will pay (in cash) to the bondholders every six months is $153,000
2. Date Account Titles and Explanation Debit Credit
Jan 1, 2017 Cash $3,400,000
Bonds payable $3,400,000
<em>(To record the issuance of bonds)</em>
Jun 30, 2017 Interest expenses $153,000
Cash $153,000
<em>(To record the first interest payment)</em>
Dec 31, 2017 Interest expenses $153,000
Cash $153,000
<em> (To record the second interest payment)</em>
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3. S/n Account Titles Debit Credit
a Cash (3,400,000*98%) $3,332,000
Discount on Bonds payable $68,000
Bonds payable $3,400,000
b Cash (3,400,000*102%) $3,468,000
Premium on bonds payable $68,000
Bonds payable $3,400,000
