Dubbin Plc Issues £3 Million in 5-Year,8%,semi-Annual Coupon Debentures B)

question 40

Multiple Choice

Dubbin Plc issues £3 million in 5-year,8%,semi-annual coupon debentures.The rate of return required by the market is 6% per annum.What is the journal entry to record the issue of the debentures (rounded to the nearest pound) ?

• A) \[\begin{array} { | l | l | l | l | }
• \hline \mathrm { Dr } & \text { Cash } & 3255906 & \\
• \hline \mathrm { Cr } & \text { Debentures } & & 3255906 \\
• \hline
• \end{array}\]
• B) \[\begin{array} { | l | l | l | l | }
• \hline \mathrm { Dr } & \text { Cash } & 2744094 & \\
• \hline \mathrm { Cr } & \text { Debentures } & & 2744094 \\
• \hline
• \end{array}\]
• C) \[\begin{array} { | l | l | l | l | }
• \hline \mathrm { Dr } & \text { Cash } & 3225466 & \\
• \hline \mathrm { Cr } & \text { Debentures } & & 3225466 \\
• \hline
• \end{array}\]
• D) \[\begin{array} { | l | l | l | l | }
• \hline \text { Dr } & \text { Cash } & 2775534 & \\
• \hline \mathrm { Cr } & \text { Debentures } & & 2775534 \\
• \hline
• \end{array}\]

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