On 1 July 2014 Kiama 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: (a) Determine the issue price of the debentures. Show workings. (7 marks) (b) Construct a schedule in the format indicated below. Show the periodic interest expense over the entire life of the debentures, using the effective interest method. (6 marks) Period Date Opening Liability Balance Interest Expense (3%) Cash Payment Reduction in liability Closing Liability Balance (c) Provide journal entries at the following dates (Note: narrations are not required): (7 marks) • 1 July 2014 • 30 June 2015 • 30 June 2020 TOTAL MARKS FOR PRACTICAL QUESTION: 20 CRITICAL THINKING QUESTION: Background: At its London Summit in 2009, after the Global Financial Crisis of 2007-2008, the G20 proposed a number of strategies to strengthen financial supervision and regulation. These included a call to accounting standard setters "to work urgently with supervisors and regulators to improve standards on valuation and provisioning and achieve a single set of high-quality global accounting standards" (BBC News, 2009. Response: The International Accounting Standards Committee Foundation responded to this call with a letter to G20 participants dated 16 September 2009 (here: at Blackboard/Learning Resources/Additional Documents & Reports). Required: Access the G20 proposals and the IASC Foundation's letter and address the following statement using the AREA Framework. The pro-regulation approach of both the G20 and the IASC Foundation, while claiming to be in the public interest, is designed to support the economic agenda of powerful interest groups. In your answer refer to the regulatory theories identified by Deegan (Topic 1, Chapter 1 of the AYB200 Financial Accounting textbook). ANALYSE: Identify the issue and why it matters. Determine what you need to find out. (30-50 words)