M&N company issues $20 million of ten-year, 7 percent, semi-annual coupon debentures to the public which pay interest every six months. The market also requires a rate of return of 7 percent. Assume that the monies come in and the debentures are allocated on the same day 30 June 2020.

a) Provide the accounting entries at 30 June 2020, 31 December 2020. Narrations are required.

b) Discuss what factors may cause a debenture is issued at a discount, premium, and par value.

Answer rating: 100% (QA)

a Accounting Entries Date Particulars Debit Credit 30 th June 2020 Bank AC Debit 20000000 To 7 Deben... View the full answer