Reference no: EM132737973
Question: On 1 January 2017, the general ledger of Survivor Ltd contained the following liability accounts:
Revenue received in advance: $21,000
Loan payable: 41,810
Debentures payable: 500,000
On 31 December 2015 Survivor Ltd borrowed $50,000 from the bank at 10% per annum interest. The bank loan was for 5 years, repayable in amounts of $13,190 at the end of each year commencing on 31 December 2016.
On 31 December 2016 Survivor Ltd issued 1,000 8%, 5-year, $500 debentures, interest payable on 30 June and 31 December, at 100% of face value.
Survivor Ltd's reporting period ends on 31 December.
During 2017 the following selected events occurred:
a. Survivor Ltd provided services for customers who had made advance payments of $21,000 on 14 January 2017.
b. At 31 December 2017 Survivor Ltd's employees earned wages of $20,000. Payroll deductions related to these wages were $1,400 for a health fund, $1,900 for PAYG withheld tax, and $1,800 for superannuation. Assume that wages earned during December 2017 will be paid during January 2018.
c. At 1 January 2018, Survivor Ltd redeemed the debentures at 96% of face value.
Required: 1. Prepare the journal entry to record the services provided in 2017 for customers who made advance payments in 2016.
2. Prepare the journal entries for the debentures' interest payments at 30 Jun 17 and 31 Dec17.
3. Prepare the adjusting journal entries to record wages expense at 31 Dec 17.
4. Prepare the journal entry for the payment of bank loan at 31 December 2017.
5. prepare an extract from the Statement of financial position as at 31 December 2017 providing the figures for the liabilities accounts.
6. Prepare the journal entry to record the redemption of debentures at 96% of face value on 1 January 2018.
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