Question

3. This Question Contains two parts. Students have to solve both the parts. (A). Gulf Stone company issued OMR 400000 of 12 % bonds of 100 OMR each on January 1 2011. The bonds are due January 1 ,2016 with the interest payable each July 1 and January 1. The bonds are issued at face value. Prepare Gulf Stone journal entry for (A) January issuance (B) July 1 Interest Payment Assume the bonds are issued at OMR 111 to yield 9 %. Prepare the journal entries (C) January 1 for issue (D) July 1 for interest payment (E) December 31 for interest amount due. (B). Presented below is some financial information related to Oman Oil corporation. Amount (OMR) Revenues 900000 Income from continues operation 200000 Comprehensive income 220000 Net Income 190000 Income from operation 320000 Selling and administration Expenses 500000 Income before income tax 300000 Find out (A) Other income and expenses (B) Finance Cost (C)Income Tax (D)Discontinued operation (E) Other Comprehensive Income

Answer 1

Date:I I Page no:- A 6 Jant 2011 CRED11 400,000 - Blbly " Jounal Entry for issuing 12 ) Bonds: DEBIT Bonk Alc 400,000 : To 124). bonds CBeing 12.1. bunds issued) Interest Expenses All 24.000 To Bonk [Being helf-yearly Interest .: 24poo u poich'

Date: _I I__Page no:_ 5 It Bund are issued at @ Bund 10 To - Ale__ gili Bond- premium on bund 11 to yield at DEB1L_ CREDIT CRED 444000 | 400,000 44,000 - o Interest TO Expense ale Bank 18000 a n 18000 - (* 400,000 x_97.x6|12) _ o interest payable ALL 18000 to Interest AYO Expense [ Being Interest paymend due) 18000

Solution to (B)

	Particular	Amount	Amount
	Total revenue		900000
Less:	Other Expenses (Balancing fig.)	100000
Less:	Selling and administration expense	500000	600000
	Income before income tax		300000
Less:	Tax expenses:		110000
	Net income		190000
Add	Other comprehensiv income		220000
	Total Income		410000