Accounting Help on Bond Issuance please! Did some of the work but, am stuck on the following...?

Question

On June 1, 2006, Hopkins Corp. issued $1,000,000, 8%, 5-year bonds at face value. The bonds were dated June 1, 2006, and pay interest semiannually on June 1 and December 1. Financial statements are prepared annually on December 31. (Round all answers to 0 decimal places. For multiple debit/credit entries, list accounts in order of magnitude.)

(a) Prepare the journal entry to record the issuance of the bonds.

(b) Prepare the adjusting entry to record the accrual of interest on December 31, 2006.

(c) Show the balance sheet presentation on December 31, 2006.

(a) June 1 Cash DB $1,000,000

Bonds Payable CR $ 1,000,000

(b) Dec. 31 Bond Interest Expense DB $____?_____

Bond Interest Payable CR $____?______

(c) Current Liabilities: ______?___________ $_____?_______

Long-term Liabilities: Bonds Payable $_______?________

(d) Prepare the journal entry to record payment of interest on June 1, 2007, assuming no accrual of interest from January 1, 2007, to June 1, 2007.

(e) Prepare the journal entry to record payment of interest on December 1, 2007.

(f) Assume that on December 1, 2007, Hopkins calls the bonds at 101. Record the redemption of the bonds.

(d) June 1 ______?________DB $_____?_______

_______?_______DB $______?_______

Cash CR $____?_________

(e) Dec. 1 Bond Interest Expense DB $ 40,000

Cash CR $ 40,000

(f) Dec. 1 Bonds Payable DB $ 1,000,000

Loss on Bond Redemption DB $ 10,000

Cash CR $ 1,010,000

Answer 1

What is 8% interest of $1-million divided in half for six months??????

I apologize if you feel insulted, but this problem seems so simple you should be able to do it in your head!

Answer 2

(b) Prepare the adjusting entry to record the accrual of interest on December 31, 2006.

Interest was last paid on Dec 1, so you only need to accrue 1 mth's interest

Dr  Interest expense $6,667 ($1m x 8% x 1/12)

Cr  Interest payable $6,667

(If you've been taught to count the no. of days, then adjust accordingly)

(c) Current Liabilities: Interest payable $6,667

Long-term Liabilities: Bonds Payable $1m

(d) Prepare the journal entry to record payment of interest on June 1, 2007, assuming no accrual of interest from January 1, 2007, to June 1, 2007.

Dr  Interest expense $33,333 (5 mths' interest)

Dr  Interest payable $6,667 (1 mth's interest)

Cr  Cash $40,000