Hello everyone,
could you please give me the clue of journal entries in these problems?
As the company pays bank overdraft interest at 20% per annum, the finance director proposes that, on 1 January Year 10, the company should:
a) Sell all the company’s land and buildings for 200,000 cash, then immediately rent them back at a rent of 15,000 per annum, payable annually in advance on 1 January.
b) Issue 500,000, 8% Debentures at 98 for cash; interest would be payable annually in arrears on 31 December. The Debentures would be payable at par in 10 equal annual instalments, the first instalment falling due on 1 July Year 11
Thank for your help!
could you please give me the clue of journal entries in these problems?
As the company pays bank overdraft interest at 20% per annum, the finance director proposes that, on 1 January Year 10, the company should:
a) Sell all the company’s land and buildings for 200,000 cash, then immediately rent them back at a rent of 15,000 per annum, payable annually in advance on 1 January.
b) Issue 500,000, 8% Debentures at 98 for cash; interest would be payable annually in arrears on 31 December. The Debentures would be payable at par in 10 equal annual instalments, the first instalment falling due on 1 July Year 11
Thank for your help!