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Q8 (Max Marks: 15) Mandy Inc. issued $750,000, 12-year, 6% debentures on January 1 2016. Mandy pays interest each 1 January & 1 July &
Q8 (Max Marks: 15) Mandy Inc. issued $750,000, 12-year, 6% debentures on January 1 2016. Mandy pays interest each 1 January & 1 July & amortises discount or premium by the straight-line method. The business can issue its debentures under various conditions. Required: a) Journalise Mandy's issue of debentures & first half yearly interest accrual & payment assuming that the debentures were issued at par. Explanations are not required. (Marks: 2) Journalise Mandy's issue of debentures & first half yearly interest accrual &payment assuming that the debentures were issued at a price of 96. Explanations are not required b) (Marks: 6) Journalise Mandy's issue of debentures & first half yearly interest accrual & payment assuming that the c) debentures were issued at a price of 102. Explanations are not required. (Marks: 5) d) Which debenture price results in the most interest expense for Mandy? Why? (Marks: 2)
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