On 1 July 2018 Charter Ltd issues through private placement $20 million in 5-year debentures that pay coupon interest on a yearly basis at a coupon rate of 8 percent per annum. At the time of issuing the securities, the market requires a rate of return of 10 percent per annum. Interest expense is determined using the effective interest method.

Required

1. Determine the issue price (show all workings). (2 Mark)
2. Provide the journal entries (show all workings) at:
   1. 1 July 2018. (1 mark)
   2. 30 June 2019. (1 mark)
   3. 30 June 2020. (1 mark)

   4. Please use the following table to answer the question. You can select and paste the table in writing area.

      Period	Opening liability	Interest expense	Coupon (Cash) payment	Increase/ Decrease in Liability	Closing liability