On January 1, 20X0, Washington Park District issued $20 million of 5-year, 6% debentures. Interest is paid semiannually. The market interest rate at issuance was 10%. 1. Compute the proceeds from issuing the debentures.
2. By using the balance sheet equation format, prepare an analysis of this bond transaction. Show entries for the issuer concerning
(b) First semiannual interest payment,
(c) Payment of maturity value.
3. Show the corresponding journal entries for (a), (b), and (c) in requirement 2.
4. Show how the bond-related accounts would appear on the balance sheets as of January 1, 20X0, and July 1, 20X0. Assume Washington Park District has already recorded the semi-annual interest payment and amortization due on the balance sheet dates.