Explain the accounting treatment to record issuance of bonds

Assignment Help Financial Accounting
Reference no: EM132579195

Wide Angle Bhd is constructing a new office building at a cost of RM2 million.When building is in the final stage of completion, Wide Angle Bhd faces financial difficulties as the company needs a fund amounted RM450,000 to complete the construction. The management team of Wide Angle Bhd decides to issue bonds instead of shares since that is a way to raise capital without diluting the current shareholders' equity. The RM450,000 of 8%, 5-year bonds were issued on 1 January 2019 and pay interest semi-annually on each 1 January and 1 July, which the payment is starting on July 2019. The market rate of bonds yield 6%. The financial year ends on 30 September. Wide Angle Bhd uses the effective interest method to amortize bond premium or discount.

REQUIRED: (Show your workings. Round your answer to the nearest RM)

Question (a) Prepare the journal entry to record the issuance of the bonds on 1 January 2019.

Question (b) Prepare the journal entry to record the related transactions of bonds on 1 July 2019 and 30 September 2019.

Question (c) Assume that Wide Angle Bhd was unable to sell the bonds dated 1 January 2019 until 1 March 2019, two months after they are dated. Explain the accounting treatment to record issuance of the bonds between interest date and interest expenses on 1 July 2019.

Reference no: EM132579195

Questions Cloud

Provide the property, plant and equipment reconciliation : You are required to: Provide the property, plant and equipment reconciliation note to the financial statements
System of lymphatic vessels : What would happen if we had no system of lymphatic vessels, and tissue fluid was moved directly back into the circulatory system
How do extremophiles adapt to their environments : How do extremophiles adapt to their environments? Describe with example?
Describe where and how you acquired the necessary skills : Describe where and how you acquired the necessary skills that helped you excel through the progression of your education. Be sure to include examples.
Explain the accounting treatment to record issuance of bonds : Wide Angle Bhd, Explain the accounting treatment to record issuance of the bonds between interest date and interest expenses on 1 July 2019.
Research reputable nonprofit organization : Research a reputable nonprofit organization that serves people and the community as a servant leader.
Dedicated laboratory information system : Why do laboratories need a dedicated laboratory information system?
Explain differences between primary and secondary sources : Explain the differences between primary and secondary sources used in research. Identify a type of resource for your Final Research Project topic that would.
What is the Investment in Sub Ltd balance : What is the Investment in Sub Ltd. balance on Parent's books as at December 31, Year 2, if the equity method has been used

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