acc ACT2111 Assignment 4.pdf - ACT2111 Introductory Financial Accounting(Semester 1 2017-18 ASSIGNMENT 4 Deadline December 12 2017(Tuesday noon Topic 7

acc ACT2111 Assignment 4.pdf - ACT2111 Introductory...

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ACT ACT2 111 111 Introductory Introductory Financial Financial Accounting Accounting (Semester 1, 2017-18) ASSIGNMENT 4 Deadline: December 12, 2017 (Tuesday) noon Topic 7 Liabilities Question 1 Sundae Limited (Sundae) issued the following bonds at ¥2,814,028 on July 1, 2017. Face Value: ¥2.5 million Coupon Rate: 8% p.a. Interest Payment Date: Every June 30 and December 31 (with the first one paid on December 31, 2017) Maturity Date: June 30, 2025 Requirements: (a) Show that the issuance price of the bonds is ¥2,814,028 if the effective interest rate is 6% p.a. And prepare the journal entry to record the issuance of the bonds on July 1, 2017. (b) Prepare a bond amortization table (up to December 31, 2020) assuming that Sundae amortizes bonds by the effective interest method. (c) Based on the bond amortization table prepared in (b), prepare necessary journal entries on (i) December 31, 2017 and (ii) June 30, 2018. (d) Sundae called the bonds on March 31, 2021 at a total sum of ¥2.7 million. Prepare necessary journal entries for the repurchase.
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