On 1 July 2014 Kiama Ltd issues $5 million in five years debentures that pay interest each six months at coupon rate 8 per cent . At the time of issuing the securities , the market requires a rate of 10 per cent . The interest expenses is calculated using the effective interest metod.

Required

(a) Determine the issue price.

(b) Provide the journal entries at

(1) 1 July 2014

(2) 30 June 2015

(3) 30 June 2016