Tinsel Ltd entered into the following transactions during 2022: On 1 June 2022 Tinsel Ltd issued...

 

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Tinsel Ltd entered into the following transactions during 2022: On 1 June 2022 Tinsel Ltd issued a 6% 90-day bill payable to a supplier to cover an account payable owing. The amount owing in the accounts payable ledger was $55,000. The bill payable was settled on maturity date (30 August). On 1 September 2022 Tinsel Ltd issued 1,000 $500 7% debentures, fully payable on application, with interest payable quarterly on 31 Dec, 31 Mar, 30 Jun and 31 Aug. All application money for the debentures was received on 1 September 2022 and the debentures were allotted on that date. Required (please show all workings): a) Calculate the interest due on the bill payable. 3 marks b) Prepare the journal entry to record the issue of the bill payable on 1 June 2022 3 marks c) Prepare the journal entry to account for the interest expense on the bill payable as at 30 June 2022 2 marks d) Prepare the journal entry to record the settlement of the bill on 30 August 2022 I 4 marks e) Calculate the quarterly interest due on the debentures 3 marks f) Prepare the journal entry to record the issue of the debentures on 1 September 2022 6 marks f) Prepare the journal entry to record the interest payment on the debentures on 31 2 marks December 2022 g) Show how the debentures would be reported on the balance sheet as at 31 December 2 marks 2022 Tinsel Ltd entered into the following transactions during 2022: On 1 June 2022 Tinsel Ltd issued a 6% 90-day bill payable to a supplier to cover an account payable owing. The amount owing in the accounts payable ledger was $55,000. The bill payable was settled on maturity date (30 August). On 1 September 2022 Tinsel Ltd issued 1,000 $500 7% debentures, fully payable on application, with interest payable quarterly on 31 Dec, 31 Mar, 30 Jun and 31 Aug. All application money for the debentures was received on 1 September 2022 and the debentures were allotted on that date. Required (please show all workings): a) Calculate the interest due on the bill payable. 3 marks b) Prepare the journal entry to record the issue of the bill payable on 1 June 2022 3 marks c) Prepare the journal entry to account for the interest expense on the bill payable as at 30 June 2022 2 marks d) Prepare the journal entry to record the settlement of the bill on 30 August 2022 I 4 marks e) Calculate the quarterly interest due on the debentures 3 marks f) Prepare the journal entry to record the issue of the debentures on 1 September 2022 6 marks f) Prepare the journal entry to record the interest payment on the debentures on 31 2 marks December 2022 g) Show how the debentures would be reported on the balance sheet as at 31 December 2 marks 2022

Answer rating: 100% (QA)

a Calculate the interest due on the bill payable Interest Principal x Rate x Time Interest 55000 x 6 ... View the full answer