QUESTION B7 (5+2 = 7 marks) The following information relates to a Debenture issue of Fraser Ltd dated 1 July 2010: Date issued: 1 July 2010 Nominal value of Debenture $1 000 each Stated interest rate 6% Interest payment dates On 31 December and 30 June each year Term to maturity 8 years Cash received for the issue $500 000 [A total of 500 Debentures are to be issued.] The company's financial year-end is 30 June. Required A. Prepare General Journal entries to record: 1. The issue of the Debentures 2. The 31 December 2010 Interest payment Calculate the Interest Expense for the year ended 30 June 2011 and prepare the Journal entry to close off the Interest Expense account for the financial period. B. (Narrations must be shown for all Journal entries). 7