On 1 April 2014, Quina Berhad issued 580,500 units of bond, each at RM150 nominal value. The bond has 4 years maturity period and pay interest in advance on semi-annual basis. The bond coupon rate is 6% per annum. On the bond issuance date, the lending market rate for the same amount of financing is 4% per annum. Quina pays the interest on the bond every 1 April and 1 October. The company financial year ends is every 31 March.

Required:

(i) Explain factors that influence companys decision to issue its bond at par, at premium and at discount. (4 Marks)

(ii) Prepare amortization table for the bond measurement throughout it maturity period (12 Marks)

(ii) Assume Quina Berhad settled its bond liability on 1 October 2017 when the price of the bond in the market was 15% lower than the bond carrying amount on this date. Show the journal entry to record the early extinguishment of the bond. (4 Marks)