Chapter 14, Problem 14.17P

(1)

To determine

Bonds

Bonds are a kind of interest bearing notes payable, usually issued by companies, universities and governmental organizations. It is a debt instrument used for the purpose of raising fund of the corporations or governmental agencies. If selling price of the bond is equal to its face value, it is called as par on bond. If selling price of the bond is lesser than the face value, it is known as discount on bond. If selling price of the bond is greater than the face value, it is known as premium on bond.

International Financial Reporting Standards

They are commonly known as IFRS. It is a set of accounting standards which are developed by independent (Non-profit) organization called as International Accounting Standards Board (IASB). It is universally accepted set of standards which states the rules and practice for accounting practice.

Generally Accepted Accounting Principles

They are commonly known as GAAP. It is a collection of generally practiced and followed rules and standards of accounting. GAAP provides global guidelines for preparation and disclosure of financial statements of public companies. It is created and developed by International Accounting Standards Board (IASB).

To Prepare: The journal entry to record the issuance of the bonds under International Financial Reporting Standards (IFRS).

(2)

To determine

To Prepare: The journal entry to record payment of interest on December 31, 2016 under IFRS.

(3)

To determine

To Prepare: The journal entry to record payment of interest on June 30, 2017 under IFRS.

(4)

To determine

To prepare: The journal entry to record the call of the bonds under IFRS.