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Determine the issue price

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Question - On 1 July 2022 Michaela Ltd issues $1 million in five-year bonds that pay interest each six months at a coupon rate of 10 per cent. At the time of issuing the securities, the market requires a rate of return of 8 per cent. Interest expense is determined using the effective-interest method.

a) Determine the issue price.

b) Provide the journal entries at:

1 July 2022

30 June 2023

30 June 2024.

Reference no: EM133185280

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