Question
The following section is taken from Privy Ltds statement of financial position at 31 December 2018. Interest is payable half-yearly on 1 January and 1
The following section is taken from Privy Ltds statement of financial position at 31 December 2018.
Interest is payable half-yearly on 1 January and 1 July. Assume no interest is accrued on 30 June.
| Current liabilities |
|
| Interest payable on unsecured notes (for 6 months from 1 July to 31 December) | $360,000 |
|
|
|
| Non-current liabilities |
|
| Unsecured notes payable, 10% due 1 January 2022 | $6,000,000 |
|
|
|
Required: Prepare journal entries to record interest payments, and redemption of unsecured notes.
a. Journalise the payment of interest on 1 January 2019.
- Prepare the entry to pay the interest due on 1 July 2019.
- Assume on 1 July 2021, after paying interest, that UGGS Ltd redeems half of the unsecured notes at 105.
- Record the redemption of the notes.
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The Essentials Of Finance And Accounting For Nonfinancial Managers
Authors: Edward Fields
3rd Edition
0814436943, 9780814436943
