(Answered) Question - non-current liabilities bondson 1 july 2007

Accounting

Question - Non-current Liabilities (Bonds)

On 1 July 2007 Michael Ltd issued $1 million in five-year debentures that pay interest every six months at a coupon rate of 10 percent. At the time of issuing the securities, the market required a rate of return of 8 percent. Any discount or premium on issue is amortised using the effective interest method.

Required -

a) Determine the issue price.

b) Provide journal entries at:

i) 1 July 2007

ii) 30 June 2008

iii) 30 June 2009

Please help me with this question. Thank you.

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