On 1 July 2022 Kiama Ltd issues $5 million in five-year bonds that pay interest every six
Question:
On 1 July 2022 Kiama Ltd issues $5 million in five-year bonds that pay interest every six months at a coupon rate of 8 per cent. At the time of issuing the securities, the market requires a rate of return of 10 per cent. The interest expense is calculated using the effective-interest method.
REQUIRED
a. Determine the issue price.
b. Provide the journal entries at:
i. 1 July 2022
ii. 30 June 2023
iii. 30 June 2024
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In this question the interest payments of 8 per annum are made each 6 months for 5 years ...View the full answer
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