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The following details relate to an issue of Debentures by Hawthorn Ltd. on July 1, 2010: Date issued: Nominal value of Debenture 1 July
The following details relate to an issue of Debentures by Hawthorn Ltd. on July 1, 2010: Date issued: Nominal value of Debenture 1 July 2010 $1 000 each Stated interest rate 6% Interest payment dates On 31 December and 30 June each year Term to maturity 8 years Cash received for the issue $500 000 The company's financial year-end is 30 June. Prepare General Journal entries to record: a. The issue of the Debentures? b. The 31 December 2010 Interest payment? c. Calculate the Interest Expense for the year ended 30 June 2011, and prepare the Journal entry to close off the Interest Expense account for the financial period. Note that: (Narrations must be shown for all Journal entries).
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