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Star Limited issues $5 million of two year, 8 per cent, semi-annual coupon debentures to the public (which pay interest each 6 months). The financial
Star Limited issues $5 million of two year, 8 per cent, semi-annual coupon debentures to the public (which pay interest each 6 months). The financial market also requires a rate of return of 8 per cent. You can assume that the money comes in and the debentures are allotted on the same day, 30 June 2020.
Required:
Provide the accounting journal entries to record:
(a)The receipt of funds and allotment of debentures on 30 June 2020.
(b)The payment of interest on 31 December 2020.
(c)The redemption of the debentures on 30 June 2022.
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