Solved by Expert Tutors
Solved by Expert Tutors
Question

Historically, SP applies for bank loans to finance its projects. In

2016, Mr. Kiran, a finance officer, made a suggestion to the top management about issuing bonds as another way of financing a new proposed construction project in Cyberjaya. Mr. Kiran also explains the advantages of issuing bonds in relative to bank loans. The idea has received good responses from the management team. The team allows bonds issuance starting 2017.
On 1 January 2017, SP issued bonds with a face value of RM3,000,000 and a maturity date of 31 December 2026. The bonds have a stated interest rate of 10% and estimated yield rate of 12%. Interest on the bond is payable on January 1 and July 1. The bond was sold to Bonda Berhad.
SP starts its construction project in Cyberjaya at the beginning of year 2017. The project is the first project that has been financed via the bond. Mr. Kiran uses effective-interest method to amortize any premium or discount related to the bonds issued by SP.
The company made a forecast that the interest rate will fall during the next few years and is planning to retire this bond. The bonds are callable at 92 on 2 July 2018.
CASE INSTRUCTIONS:
(8)                  Prepare the journal entries to record the bond issuance. (Show calculation).
 
(9)                  Prepare the adjusting entries as of 31 December 2017. (Show calculation).
 
can you please help me ? :(

Step-by-step answer

The student who asked this found it Helpful

a molestie consequat, ultrices ac magna. Fusce duictum vitae odio. Donec aliquet. Lorem ipsum dolor sit a

icitur laoreet. Nam risus ante, dapibus a molesipiscing elit. Nam lacinia pulvinar tortor nec facilisis

acinia pulvi

ipsum dolor sit amet, consectetur adipiscing elit. Nam


tesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui l


ur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lectus, co


e vel laoreet ac, dictum vitae odio. Donec aliquet

Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet.


lestie consequat, ultrices ac magna. Fusce dui lectus, congue vel

ce dui lectus, congue vel laoreet ac, dictum

m risus ante, dapibus a molestie


, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pell


dictum vitae odio. Donec aliquet. Lorem ips


Bonds Issue.png



ur laoreet. Nam risus ante, dapibus a molestie conseq

Adjusting Entries.png


ur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce dui lec

Amortization.png

Adjusting Entries.png
a. Fusce dui lectus, congue vel laoreet ac, a. F , dictum vi sum dolor usce dui l fficitur laor a molestie conseq ac, dict ng elit. Nam lac itur lao onec aliquet. Lorem ipsu usce d nec facilisis. P

Subscribe to view the full answer

Subject: Accounting, Business

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question
Let our 24/7 Accounting tutors help you get unstuck! Ask your first question.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes