Jauhari Corporation issued 14%, 5-year bonds with a par value of RM5,000,000 on January 1, 2014....

 

 

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Jauhari Corporation issued 14%, 5-year bonds with a par value of RM5,000,000 on January 1, 2014. Interest is to be paid semiannually on each June 30 and December 31. The bonds are issued at RM5,368,035 cash when the market rate for this bond is 12%. Required (i) Prepare journal entry to record the issuance of the bonds on January 1, 2014. (1.5 marks) (ii) Show how the bonds would be reported on Jauhari Corporation's Statement of Financial Position at January 1, 2014. (2 marks) (iii) Assume that Jauhari Corporation uses the effective interest method of amortization of any discount or premium on bonds. Prepare the general journal entry to record the first semi-annual interest payment on June 30, 2014. Show all workings BAC 1614 FUNDAMENTALS OF FINANCIAL ACCOUNTING MIMAM QUESTION 1 Brother Berhad is a consultation business that provide consultation service regarding accounting treatment. The following balances have been extracted from the books of Brother Berhad as at 31 December 2020. Consultation service Salaries expenses Advertising expenses Prepaid insurance Entertainment expenses Utilities charges Rental and maintenance Miscellaneous expenses Share capital-ordinary Supplies Transportation cost Investments Land Copyrights Building Furniture and Fixtures Accumulated Depreciation: Building Furniture and Fixtures 5% Loan from CIMB Cash Account receivable Account payable Dividend Retained earnings, 1 Jan Debit (RM) 1/6 125,000 7,000 27,000 7,875 3,750 27,000 $8,000 105,000 24,000 200,000 500,000 54,000 325,000 65,000 58,000 65,000 80,000 16 OCTOBER 30 1,731,625 Credit (RM) 425,000 800,000 58,500 13,000 300,000 40,000 Additional information: 1. Interest on loan is not yet paid for the year. The CIMB loan is sign on 1 April 2020, and the loan will mature in 5 years. 2. Acquired a copyright on 1 January 2020. The copyright has a useful life of 40 years. 95,125 1,731,625 Continued... 3. Depreciation was to be provided: Building Furniture and Fixtures 4. Total utilities charge for the year is RM4,000. 5. Supplies balance on 31 December 2020 was RM35,000. 2% on straight line method. 10% on straight line method. 6. Insurance paid on 1 July 2020 for twelve-month coverage. 7. Consultation service completed but not billed with amount RM25,000. 8. Including in the trial balance are RM3,000 rental and maintenance paid for January 2021. Required: (12 marks) a) Prepare the statement of profit or loss for the year ended 31 December 2020. b) Prepare the retained earnings statement for the year ended 31 December 2020. c) Prepare the statement of financial position as at 31 December 2020. (4 marks) (9 marks) [Total 25 marks] Jauhari Corporation issued 14%, 5-year bonds with a par value of RM5,000,000 on January 1, 2014. Interest is to be paid semiannually on each June 30 and December 31. The bonds are issued at RM5,368,035 cash when the market rate for this bond is 12%. Required (i) Prepare journal entry to record the issuance of the bonds on January 1, 2014. (1.5 marks) (ii) Show how the bonds would be reported on Jauhari Corporation's Statement of Financial Position at January 1, 2014. (2 marks) (iii) Assume that Jauhari Corporation uses the effective interest method of amortization of any discount or premium on bonds. Prepare the general journal entry to record the first semi-annual interest payment on June 30, 2014. Show all workings BAC 1614 FUNDAMENTALS OF FINANCIAL ACCOUNTING MIMAM QUESTION 1 Brother Berhad is a consultation business that provide consultation service regarding accounting treatment. The following balances have been extracted from the books of Brother Berhad as at 31 December 2020. Consultation service Salaries expenses Advertising expenses Prepaid insurance Entertainment expenses Utilities charges Rental and maintenance Miscellaneous expenses Share capital-ordinary Supplies Transportation cost Investments Land Copyrights Building Furniture and Fixtures Accumulated Depreciation: Building Furniture and Fixtures 5% Loan from CIMB Cash Account receivable Account payable Dividend Retained earnings, 1 Jan Debit (RM) 1/6 125,000 7,000 27,000 7,875 3,750 27,000 $8,000 105,000 24,000 200,000 500,000 54,000 325,000 65,000 58,000 65,000 80,000 16 OCTOBER 30 1,731,625 Credit (RM) 425,000 800,000 58,500 13,000 300,000 40,000 Additional information: 1. Interest on loan is not yet paid for the year. The CIMB loan is sign on 1 April 2020, and the loan will mature in 5 years. 2. Acquired a copyright on 1 January 2020. The copyright has a useful life of 40 years. 95,125 1,731,625 Continued... 3. Depreciation was to be provided: Building Furniture and Fixtures 4. Total utilities charge for the year is RM4,000. 5. Supplies balance on 31 December 2020 was RM35,000. 2% on straight line method. 10% on straight line method. 6. Insurance paid on 1 July 2020 for twelve-month coverage. 7. Consultation service completed but not billed with amount RM25,000. 8. Including in the trial balance are RM3,000 rental and maintenance paid for January 2021. Required: (12 marks) a) Prepare the statement of profit or loss for the year ended 31 December 2020. b) Prepare the retained earnings statement for the year ended 31 December 2020. c) Prepare the statement of financial position as at 31 December 2020. (4 marks) (9 marks) [Total 25 marks]

Answer rating: 100% (QA)

Prepare journal entry to record the issuance of the bonds on January 1 2014 Debit Credit Cash 5368035 Bond Payable 5000000 Discount on Bond Payable 368035 This journal entry records the issuance of th... View the full answer