Question
BMB Limited issued $100,000 12-year 6% bonds on 1 January 20x1. The bonds pay interest semi-annually on 30 June and 1 January, with the principal
BMB Limited issued $100,000 12-year 6% bonds on 1 January 20x1. The bonds pay interest semi-annually on 30 June and 1 January, with the principal repaid at the end of 12 years. The market rate on the bonds at the time of issue was 8% and the company has a 31 December financial year-end.
a. Prepare the journal entry for 1 January 20x3.
b. Prepare the journal entry for 30 June 20x3.
c. Prepare the journal entry for 31 December 20x3.
d. What is the total interest expense for the year ended 20x3?
e. What is the total interest expense for the year ended 20x4?
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