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Determine the price of debentures on January

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Reference no: EM132504392

Question - On 1 January 2019, Janice Ltd issued $10,000,000 6%, 5-year debentures. Interest is payable half-yearly on 30 June and 31 December. The company's financial year ends on 31 December. Any premiums or discounts on the issue are to be amortized over the entire term using the effective interest method. The market interest rate is 4% per annum.

(a) Determine the price of debentures on 1 January 2019.

(b) Write journal entries to record the debenture issued, the payments of interest, amortization of discount or premium for the financial year ending 31 December 2019. Narratives are not required.

Reference no: EM132504392

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