Assignment-chap 5 - C HAPTER 4-5 EXERC ISES 1. On August 1...

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CHAPTER 4-5 EXERCISES 1. On August 1 2005, Navin Company issued Rs 500,000 15% 10 year debentures for Rs 480,000. Interest is payable on January 1 and July 1. The company’s accounting year is March 31. The company follows straight line method of amortization of debenture discount. Prepare the journal entries to record the following: a. Issuance of debentures on August 1 2005 b. Payment of semi-annual interest on Jan 1 2006 and amortization of discount c. Accrual of interest on March 31 2006 and amortization of discount 2. On March 1, Vani Company issued Rs 1 million of 10%, 15 years bonds. Interest is payable semi annually. Compute the issue price of bonds if the market rate on March 1 is: a) 18% b) 10% c) 8% 3. On Jan 1 2003 Easy Ways Company issued Rs 300,000 18% 10 year bonds. Interest is payable on January 1 and July 1. The company’s accounting year is December 31. a. Prepare the journal entries to record the issuance of the bonds assuming the bonds were issued for i) Rs 280,000 ii) Rs 310,000
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Assignment-chap 5 - C HAPTER 4-5 EXERC ISES 1. On August 1...

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