TELUS Corporation issued 4.30% notes on June 30, 2019.7 The debentures have the following specifications: Principal...

 

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TELUS Corporation issued 4.30% notes on June 30, 2019.7 The debentures have the following specifications: Principal amount Maturity date Issue price US$500 million June 30, 2049 99.048% of principal amount Coupon rate Effective interest rate Interest payment dates Initial interest payment date December 31, 2019 4.30% 4.357% June 30 and December 31 Required (round your calculations to the nearest dollar): 1. Prepare a journal entry to record the sale of these debentures on June 30, 2019. Use a discount account. 2. Prepare the journal entry to record the payment of interest and amortization of the discount on December 31, 2019. The company uses the effective-interest method of amortization with a discount account. 3. Show the amounts that should be reported on TELUS's financial statements for 2019. The company's fiscal year ends on December 31. 4. Compute the total amount f interest expense over the life of the notes. 5. After looking at the issue price, a student asked why TELUS did not simply sell the notes at 100 percent of the principal amount instead of selling them at a discount. How would you respond to this question? TELUS Corporation issued 4.30% notes on June 30, 2019.7 The debentures have the following specifications: Principal amount Maturity date Issue price US$500 million June 30, 2049 99.048% of principal amount Coupon rate Effective interest rate Interest payment dates Initial interest payment date December 31, 2019 4.30% 4.357% June 30 and December 31 Required (round your calculations to the nearest dollar): 1. Prepare a journal entry to record the sale of these debentures on June 30, 2019. Use a discount account. 2. Prepare the journal entry to record the payment of interest and amortization of the discount on December 31, 2019. The company uses the effective-interest method of amortization with a discount account. 3. Show the amounts that should be reported on TELUS's financial statements for 2019. The company's fiscal year ends on December 31. 4. Compute the total amount f interest expense over the life of the notes. 5. After looking at the issue price, a student asked why TELUS did not simply sell the notes at 100 percent of the principal amount instead of selling them at a discount. How would you respond to this question?

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