Question

On January 1, 2017, Boston Enterprises issues bonds that have a $1,500,000 par value, mature in 20 years, and pay 6% interest semiannually on June 30 and December 31. The bonds are sold at par. 1. How much interest will Boston pay (in cash) to the bondholders every six months

Answer 1

$45,000

Step-by-step explanation:

Since the bond pay 6% interest semiannually on June 30 and December 31, the amount of interest Boston will pay (in cash) to the bondholders every six months can be calculated as follows:

Semiannual interest payment = $1,500,000 × (6% ÷ 2) = $1,500,000 × 3% = $45,000.

Therefore, the amount of interest Boston will pay (in cash) to the bondholders every six months is $45,000.