Wide Angle Bhd is investing RM2 million in the construction of a new office building. Wide Angle Bhd is having financial issues as the building nears completion, since the business need a capital of RM450,000 to finish the project. Wide Angle Bhd's management team decides to issue bonds rather than shares in order to raise cash without eroding current shareholders' stake. The RM450,000 5-year bonds with an interest rate of 8% were issued on January 1, 2019 and pay interest semi-annually on January 1 and July 1 each year, with the first payment beginning in July 2019. Bonds with a market rate of 6% interest are available. The fiscal year comes to a conclusion on September 30th. Wide Angle Bhd amortises its debt using the effective interest rate. bond premium or discount. Needed: (Exhibit your methods.) Your answer should be rounded up to the nearest RM.) Prepare a journal entry to document the bond issue on January 1, 2019. Prepare a journal entry to record the bond trades on July 1st and September 30th, 2019. Assume that Wide Angle Bhd was unable to sell the bonds issued on January 1, 2019 until March 1, 2019, two months later. Explain the accounting procedure for recording the bond issue between the interest date and the interest expense on July 1, 2019
Wide Angle Bhd is investing RM2 million in the construction of a new office building. Wide Angle Bhd is having financial issues as the building nears completion, since the business need a capital of RM450,000 to finish the project. Wide Angle Bhd's management team decides to issue bonds rather than shares in order to raise cash without eroding current shareholders' stake. The RM450,000 5-year bonds with an interest rate of 8% were issued on January 1, 2019 and pay interest semi-annually on January 1 and July 1 each year, with the first payment beginning in July 2019. Bonds with a market rate of 6% interest are available. The fiscal year comes to a conclusion on September 30th. Wide Angle Bhd amortises its debt using the effective interest rate. bond premium or discount.
Needed:
(Exhibit your methods.) Your answer should be rounded up to the nearest RM.)
Prepare a
Prepare a journal entry to record the bond trades on July 1st and September 30th, 2019.
Assume that Wide Angle Bhd was unable to sell the bonds issued on January 1, 2019 until March 1, 2019, two months later. Explain the accounting procedure for recording the bond issue between the interest date and the interest expense on July 1, 2019.
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