Question
In: Accounting
The following section is taken from Privy Ltd’s statement of financial position at 31 December 2018....
The following section is taken from Privy Ltd’s 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.
Solutions
Expert Solution
I had tried to explain as much clear as possible.
Half of the notes are due for redemption on1july 2021. Hence the
value of notes redeems is $300,000 and it is redeemed at a premium
of 5 percent that is $15,000 as I had shown in the picture.
ekkarill92 answered 1 year agoRelated Solutions
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ASTRO Inc. Statement of Financial Position December 31, 2018 Assets
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