MHB Ltd. sold $6,740,000 of 12% bonds, which were dated March 1, 2023, on June 1, 2023. The bonds paid interest on September 1 and March 1 of each year. The bonds' maturity date was March 1, 2033, and the bonds were issued to yield 14%. MHB's fiscal year-end was February 28, and the company followed IFRS. On June 1, 2024, MHB bought back $2,740,000 worth of bonds for $2,640,000 plus accrued interest. (a) Your answer is partially correct. Using 1. a financial calculator, or 2. Excel function PV, calculate the issue price of the bonds and prepare the entry for the issuance of the bonds. Hint: Use the account Interest Expense in your entry). (Round answer to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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MHB Ltd. sold $6,740,000 of 12% bonds, which were dated March 1, 2023, on June 1, 2023. The bonds paid interest on September 1
and March 1 of each year. The bonds' maturity date was March 1, 2033, and the bonds were issued to yield 14%. MHB's fiscal year-end
was February 28, and the company followed IFRS.
On June 1, 2024, MHB bought back $2,740,000 worth of bonds for $2,640,000 plus accrued interest.
(a)
Your answer is partially correct.
Using 1. a financial calculator, or 2. Excel function PV, calculate the issue price of the bonds and prepare the entry for the issuance
of the bonds. Hint: Use the account Interest Expense in your entry). (Round answer to O decimal places, e.g. 5,275. Credit account
titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the
account titles and enter O for the amounts. List all debit entries before credit entries.)
Account Titles and Explanation
Cash
Interest Expense
Bonds Payable
Debit
5631871
1108129
Credit
6740000
Transcribed Image Text:MHB Ltd. sold $6,740,000 of 12% bonds, which were dated March 1, 2023, on June 1, 2023. The bonds paid interest on September 1 and March 1 of each year. The bonds' maturity date was March 1, 2033, and the bonds were issued to yield 14%. MHB's fiscal year-end was February 28, and the company followed IFRS. On June 1, 2024, MHB bought back $2,740,000 worth of bonds for $2,640,000 plus accrued interest. (a) Your answer is partially correct. Using 1. a financial calculator, or 2. Excel function PV, calculate the issue price of the bonds and prepare the entry for the issuance of the bonds. Hint: Use the account Interest Expense in your entry). (Round answer to O decimal places, e.g. 5,275. Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts. List all debit entries before credit entries.) Account Titles and Explanation Cash Interest Expense Bonds Payable Debit 5631871 1108129 Credit 6740000
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