Question:
Laosian Ltd received the following bills during the last 3 months of the financial year ended 30 June.
Date of bill Amount of debt Term of bill Interest rate Date of discount Discountrate
1. April 1 $10,000 60 days 8% May 1 10%
2. May 2 $16,000 90 days 9% June 11 11%
3. May 15 $13,000 60 days 10%
4. June 1 $8,500 60 days 9%
5. June 8 $11,000 60 days 8% June 24 10%
6. June 16 $14,000 60 days 10%
Required
(a) Determine the due date and the maturity value for each bill; for bills 1, 2 and 5,determine also the discount period, the amount of discount, and the net proceeds.
(b) Prepare journal entries to record the discounting of bills 1, 2 and 5 at the bank
(c) Prepare a journal entry to accrue interest on bills 3, 4 and 6 on 30 June
(d) Prepare journal entries to record the collection of bills 3, 4 and 6 in the next financial year.