Prepare the journal entries at the time of issuance, at the end of years 1, 2, and 3 for the issuance of a 3 year bond. the bond has the value of 1000,000, a stated coupon rate of 5% and a market rate of 3%. Cash coupon interest payments are made at the end of years 1, 2, 3 debit credit Journal entry at issuance, journal entry at end of year1 , journal entry at end of year 2, journal entry at end of year 3,
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
Prepare the journal entries at the time of issuance, at the end of years 1, 2, and 3 for the issuance of a 3 year bond. the bond has the value of 1000,000, a stated coupon rate of 5% and a market rate of 3%. Cash coupon interest payments are made at the end of years 1, 2, 3
debit credit
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