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AI Plc issued 10,000, 11% $ 1000 bonds on 1 July 2020 yielding 13%. The semi-annual coupon paying bonds pay interest on 31 December and
AI Plc issued 10,000, 11% $ 1000 bonds on 1 July 2020 yielding 13%. The semi-annual coupon paying bonds pay interest on 31 December and 30 June. The bond matures five years from date of issue. AI's financial year ends on 30th June. |
Required (show all your workings): |
(i) Calculate the bond issue proceeds. (2 marks) |
(ii) The journal entries to record the bond issue (2 marks) |
(iii) The journal entries to record the the first two interest payments under both inerest method and straight line method (4 marks) |
(iv) Present an excerpt of the balance sheet, long term liability section as at 30 June 2021 for interest and straight line methods(2 marks) |
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