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ACCOUNTING FOR LIABILITIES: Based on the information provided in the company’s Annual Report for Financial Year...

ACCOUNTING FOR LIABILITIES:

Based on the information provided in the company’s Annual Report for Financial Year 2035 you have to answer the following sub-questions. On 1 July 2035 Glorious Ltd issues $3 million in six-year debentures that pay interest each six months at a coupon rate of 8 per cent. At the time of issuing the securities, the market requires a rate of return of 6 per cent. Interest expense is determined using the effective-interest method. Required: (a) Determine the issue price

(b) Provide the journal entries at: (i) 1 July 2035

(ii) 30 June 2036

(iii) 30 June 2037

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ekkarill92 answered 2 years ago
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