GHI Ltd is a local media enterprise that has its shares listed on Hong Kong Stock Exchange.
Question:
GHI Ltd is a local media enterprise that has its shares listed on Hong Kong Stock Exchange. Owing to expand further its business enterprise, it issued 2-year bonds on April 1, 2021. The bond had the principal amount of $10 million and carry a fixed interest of 6% per annum. Interest is paid semi-annually on 30 September and 31 March. The market interest rate for similar debts was 8% per annum.
Required
Assume GHI Ltd measured its issued bonds at amortized cost. Prepare journal entries to account for its bond transactions during the year ended 30 September 2021. (Narratives are not required, for journal entries. All workings must be shown)
Horngrens Accounting
ISBN: 978-0133855388
10th Canadian edition Volume 2
Authors: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura, Carol A. Meissner, Jo-Ann L. Johnston, Peter R. Norwood