i. Prepare the entry on March 1 when the note was issued. ii. Prepare any adjusting entries necessary on June 30 in order to prepare the semi-annual financial statements. Assume no other interest accrual entries have been made. iii. Prepare the adjusting entry at August 31 to accrue interest. iv. Prepare the entry to record payment of the note at maturity.
i. Prepare the entry on March 1 when the note was issued. ii. Prepare any adjusting entries necessary on June 30 in order to prepare the semi-annual financial statements. Assume no other interest accrual entries have been made. iii. Prepare the adjusting entry at August 31 to accrue interest. iv. Prepare the entry to record payment of the note at maturity.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 4 (
a. On January 1, Cardano Berhad issued RM1,200,000, 6%, 5-year bonds at face value.
Interest is payable semi-annually on July 1 and January 1.
Required:
Prepare journal entries to record the
i. Issuance of the bonds.
ii. Payment of interest on July 1, assuming no previous accrual of interest.
iii. Accrual of interest on December 31.
b. On March 1, Solana Berhad borrows RM135,000 from Affin Bank by signing a 6-month,
8%, interest-bearing note.
Required:
i. Prepare the entry on March 1 when the note was issued.
ii. Prepare any adjusting entries necessary on June 30 in order to prepare the semi-annual
financial statements. Assume no other interest accrual entries have been made.
iii. Prepare the adjusting entry at August 31 to accrue interest.
iv. Prepare the entry to record payment of the note at maturity.
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