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Prepare the journal entry to record the interest received

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Reference no: EM132524722

On 1 January 2018, Open Bhd purchased 12% (stated rate) bonds, having a maturity value of RM500,000 for RM537,907.40. The bonds provide the bondholders with a 10% yield (market rate). They are dated 1 January 2018 and mature 1 January 2023 with interest receivable 31 December of each year. Open Bhd business model is to hold these bonds to collect contractual cash flows.

REQUIRED:

Question (a) Prepare the journal entry at the date of the bond purchase.

Question (b) Prepare bond amortization schedule.

Question (c) Prepare the journal entry to record the interest received and the amortization for 2018.

Question (d) Prepare the journal entry on 1 January 2023.

Reference no: EM132524722

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