HA2032 Tutorial Questions On Corporate And Financial Accounting - Assignment 1

Week 3 Question (10 marks)

Adelaide Briton Ltd issued a prospectus on 1 June 20X1 inviting applicants for 3,000 debentures of face amount $2,000, payable in full on application. Terms were 12% p.a. interest, payable annually, with a maturity date of 30 June 20X4. Exactly the right amount of applications were received by 30 June 20X1.

Required:

1. Prepare general journal entries to record the issue of debentures. (3 marks)
2. Prepare general journal entries to record the payments of interest and the repayment of principal. (3 marks)
3. Prepare ledger entries to record (a) and (b) above. (4 marks)