a) What factors should be considered in determining the issue price of a debenture. On 1 July 2018 Bombo Ltd issues $2 million in six-year debentures that pay interest each six months at a coupon rate...

a) What factors should be considered in determining the issue price of a debenture.

 On 1 July 2018 Bombo Ltd issues $2 million in six-year debentures that pay interest each six
months at a coupon rate of 8 per cent. At the time of issuing the securities, the market requires a
rate of return of 6 per cent. Interest expense is determined using the effective-interest method.
Required:
(i) Determine the issue price of the debenture.
(ii) Provide the journal entries at:
1 July 2018, 30 June 2019, & 30 June 2020.