Question: On May 1, year 1, Star Communications issued at par $20 million of 9%, 20-year bonds payable. Interest is payable semiannually each May 1 and

On May 1, year 1, Star Communications issued at par $20 million of 9%, 20-year bonds payable. Interest is payable semiannually each May 1 and November 1.

a. What is the amount of cash paid to bondholders for interest during year 1? $

b. Prepare the adjusting journal entry necessary at December 31, year 1 regarding this bond issue.

c. Interest expense on this bond issue reported in Star’s year 1 income statement is: $

d. With respect to this bond issue, Star’s balance sheet at December 31, year 1, includes bonds payable of $ and interest payable of $

e. Prepare the journal entry made by Star on May 1, year 2, to record the semiannual payment of interest to bondholders.

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