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Prepare journal entry to record issue of debenture on may

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Cleopatra Ltd offers $400 million of debentures, which is payable on application. The Interest rate on debentures is 8.5% per annum, payable annually. By 15 March 2020, application is received for $450 million debenture. The debentures are allotted on 1 May 2020, which coincides with Cleopatra Ltd's financial year-end. Additional debenture application money is returned on 1 June 2020.

Required:

Problem 1: Prepare the journal entries to record the issue of the debenture on 1 May 2020 and annual interest payments on 30 April 2021 and 30 April 2022.

Reference no: EM132629216

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