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Calculate the amortised cost of the bonds

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Reference no: EM132934763

Question - On 1 July 2018, Grommet Ltd issues a five-year bonds with a total face value of $1,000,000 and a coupon rate of 10% per annum, payable annually in arrears. The market required interest rate for the Bond was 8%.

REQUIRED -

1. Provide the journal entry to issue of the bond for Grommet Ltd on 1 July 2018.

2. Calculate the amortised cost of the bonds as at 30 June 2019 by preparing a schedule of amortised cost/interest payment.

3. Provide the journal entry to account for the year ending 30 June 2019.

Reference no: EM132934763

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