The following information relates to a debentures issue of Justice Ltd dated 1 January 2019. The companys
Question:
The following information relates to a debentures issue of Justice Ltd dated 1 January 2019.
The company’s financial year‐end is 30 June.
Required
(a) Prepare general journal entries to record:
i. the issue of the debentures
ii. the 30 June and 31 December 2019 interest payments
iii. the 30 June 2020 interest payment.
(b) Calculate the interest expense for the year ended 30 June 2020, and prepare the entry to close the Interest Expense account to the Profit or Loss Summary account.
(c) Show how the debentures will be reported at 30 June 2020.
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