What factors should be considered in determining the issue price of a debenture. (2 marks) b) On
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What factors should be considered in determining the issue price of a debenture. (2 marks) b) On 1 July 2018 Bombo Ltd issues $2 million in six-year debentures that pay interest each six months at a coupon rate of 8 per cent. At the time of issuing the securities, the market requires a rate of return of 6 per cent. Interest expense is determined using the effective-interest method. Required: (i) Determine the issue price of the debenture. (2 marks) (ii) Provide the journal entries at: (6 marks) 1 July 2018, 30 June 2019, & 30 June 2020.
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Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins
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