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Determine the issues price

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Question - On 1 July 2014 Kiama Ltd issues 5 million in five years debentures that pay interest each six months at a coupon rate of 8 percent. At the time of issuing the securities the market requires a rate of return 10 percent. The interest expense is calculated using the effective interest method.

1. Determine the issues price

2. Provide the journal entries at 1 July

30 June 2015

30 June 2016

Reference no: EM133150018

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