Question: On 1 July 2018 Tea tree Ltd issues $2 million in six-year debentures that pay interest each six months at a coupon rate of 8

On 1 July 2018 Tea tree Ltd issues $2 million in six-year debentures that pay interest each six months at a coupon rate of 8 per cent. At the time of issuing the securities, the market requires a rate of return of 6 per cent. Interest expense is determined using the effective-interest method

Provide the journal entries at: (6 marks)

1 July 2018, 30 June 2019, & 30 June 2020.

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