Determine the fair value of the debentures at time of issue

Assignment Help Financial Accounting
Reference no: EM131972043

Advanced Financial Accounting Assignment -

On 1 July 2015 Kruger Ltd privately issues $900 000 million in six-year debentures, which pay interest each six months at a coupon rate of 6 per cent per annum. At the time of issuing the securities, the market requires a rate of return of 4 per cent. Consistent with the requirements of AASB 9, the debentures are accounted for using the effective interest method.

REQUIRED

(a) Determine the fair value of the debentures at the time of issue (which will also be their issue price).

(b) Provide the journal entries at:

(i) 1 July 2015.

(ii) 31 December 2015.

(iii) 30 June 2016.

Reference no: EM131972043

Questions Cloud

What is the standard deviation of the cml portfolio : Assuming a risk-free rate of 4% and an expected return on the market portfolio of 9%, what is the expected return of LPI?
Explain the concept of cost of capital : How can you explain the concept of cost of capital? Do you believe that a firm should use the same cost of capital for all of its projects? Why or why not?
What is res estimated warranty payable : Roy Electric (RE) owed Estimated Warranty Payable of $1, 200 at the end of 2015. What is RE's Estimated Warranty Payable at the end of 2016?
Explain the effects that depreciation has on net income : Explain a capital budgeting method (NPV, IRR, etc.) used to examine potential investments. Explain the advantages and disadvantages.
Determine the fair value of the debentures at time of issue : ACC204 Advanced Financial Accounting Assignment. Determine the fair value of the debentures at the time of issue (which will also be their issue price)
What is npv of this project without risk management : Lyon Co. purchases a capital asset at a cost of $900 million for an investment project, which will generate an income stream over a five-year period.
Confidence interval for the cost of a cup of coffee : Assume the population standard deviation is $0.93. What is the 90% confidence interval for the cost of a cup of coffee?
What was the companys net income for the prior year : What will the new break-even point be if fixed costs increase by 5 percent? What was the company's net income for the prior year?
Find the differential equation is exact or not : Determine whether the given differential equation is exact. If it is exact, solve it. (If it is not exact, enter NOT.)

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd