Calculate the present value of bonds

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Reference no: EM132419874

On 1 July 2018, Carrot Ltd issued five-year bonds with a total face value of $1,000,000 and which paid interest of 10 per cent annually in arrears. The market required interest rate for Carrot Ltd's bonds was 14 per cent.

Required

a) Calculate the present value of bonds. Round to the nearest dollar.

b) Prepare the table to determine the amortising cost using the effective interest method from 30 June 2019 to 30 June 2023.

c) Prepare the journal entry to issue the bond at 1 July 2018.

d) Prepare the journal entry at 30 June 2019 to record the interest paid

Reference no: EM132419874

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