Corona Ltd issued 5 - year bonds with a total face value of $500 000 and which paid interest of $50 000 annually in arrears on 1 July 2019. The market-required interest rate for Corona Ltds bonds was 12 per cent.

Present value of 12% for 5 years = 0.567

Annuity factor of 12% for years = 3.605

Required:

Prepare the journal entry to issue the bonds at 1 July 2019, and the entry at 30 June 2020 to record the interest paid.