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Record the journal entry when first issuing the bonds

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Question - On 1 July 2027, Barrack Ltd issued 100 five-year bonds with a face value of $1,000 and a coupon rate of 8 per cent per annum, payable annually in arrears at the end of the financial year. Barrack Ltd received $1,020 for each of the bonds. This suggests an effective interest rate (market rate at time when the bonds were issued) of about 7.5 per cent.

a) Record the journal entry when first issuing the bonds?

b) Calculate the total interest expense recognised by Barrack Ltd over the life of bonds (ignore any tax implications)

c) Record the journal entry for the first coupon payment?

Reference no: EM132999568

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