Question
On January 1, 2014, GLOBAL FINANCIAL INV. Holding has issued bonds which were having OMR 400,000 as par value but they were issued for 93.
On January 1, 2014, GLOBAL FINANCIAL INV. Holding has issued bonds which were having OMR 400,000 as par value but they were issued for 93. It was evident from the records that the due date for such bonds was in 2024.
Considering the fact of Market rate in mind, GLOBAL FINANCIAL INV. Holding takes a hard decision to call its bonds back on 1stJanuary 2019 and then cancel them at 101.
Annual interest which was paid by the GLOBAL FINANCIAL INV. Holding is 8% and it has been observed that the amortization of the discount was done using reducing balance method.
a) Calculate the amount of Amortized and un-Amortized discount.
b) Pass journal entries from January 1, 2014 to January 1, 2019
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