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Sunland Ltd. sold $6,440,000 of 12% bonds, which were dated March 1, 2017, on June 1,...

Sunland Ltd. sold $6,440,000 of 12% bonds, which were dated March 1, 2017, on June 1, 2017. The bonds paid interest on September 1 and March 1 of each year. The bonds' maturity date was March 1, 2027, and the bonds were issued to yield 14%. Sunland's fiscal year-end was February 28, and the company followed IFRS. On June 1, 2018, Sunland bought back $2,440,000 worth of bonds for $2,340,000 plus accrued interest.

Prepare the entry for the issuance of the bonds.

Prepare the journal entry for the scheduled interest payment on September 1, 2017.

Prepare any year-end entry required at February 28, 2018.

Prepare the entry required for the redemption of face value $2,350,000 of the bonds on June 1, 2018.
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Journal entry for the issuance of the bonds June,01,2017 Cash / Bank A/c Dr 64,40,000 To 12% bonds 64,40,000 Being 12 % bonds sold which were dated Mar 01 Journal entry for the scheduled interest payment on September 1, 2017 Sept,2017 Interest on 12% bonds A/c Dr 3,86,400 To Interest on bonds Payable 3,86,400 Interest on bonds Payable A/c 3,86,400 To Cash / Bank A/c 3,86,400 Year-end entry required at February 28, 2018 Feb,28,2018 Interest on 12% bonds A/c Dr 3,86,400 To Interest on bonds Payable 3,86,400 P&L A/c 7,72,800 To Interest on 12% bonds A/C 7,72,800 June 1, 2018 Redemption Purchase 12% bonds A/C Interest A/c June ,1,2018 23,50,000 47,000 To cash/Bank A/c 23,40,000 57,000 To Profit & loss A/c or Capital reserve A/c 12% Bonds A/C 23,50,000 To Purchase 12% bonds A/C 23,50,000

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