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Prepare the journal entry to issue the bonds at January

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Reference no: EM132996077

Question - On 1 January 2020, Orange Ltd issued 10 years bond with a total face value of $500,000 and which pays interest at 10% annually in arrears. The market interest rate was 8%.

Required - Prepare the journal entry to issue the bonds at 1 January 2020 and the entry at Dec 31, 2020 (December is the end of the financial year)

Present value factor at 8% for 10th year = 0.4632

Cumulative present value factor at 8% for 10 years = 6.6101.

Reference no: EM132996077

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