Reference no: EM132547468
Question - Whispering Ltd. sold $6,830,000 of 8% bonds, which were dated March 1, 2020, on June 1, 2020. The bonds paid interest on September 1 and March 1 of each year. The bonds' maturity date was March 1, 2030, and the bonds were issued to yield 10%. Whispering's fiscal year-end was February 28, and the company followed IFRS. On June 1, 2021, Whispering bought back $2,830,000 worth of bonds for $2,730,000 plus accrued interest.
Required -
a. Using a financial calculator, or Excel function PV, calculate the issue price of the bonds and prepare the entry for the issuance of the bonds.
b. Prepare the journal entry for the scheduled interest payment on September 1, 2020.
c. Prepare any year-end entry required at February 28, 2021.
d. Prepare the entry required for the redemption of face value $2,830,000 of the bonds on June 1, 2021.