COURSE: DIPLOMA IN ACCOUNTING $/$SUBJECT: TAXATIONChapter $3$ Tutorial $-$ Part $1$: Issuance$/$Terbitan

On $1^{st}$ January $2020,$ Aroi Bhd issued $10$ million $3\%$ redeemable preference shares at

RM$1\mathrm{.}10$ each, redeemable at a premium of $5\mathrm{.}3\%$ on $31$ December $2022.$ Interest is

payable on paid$-$up capital. The effective interest rate is $4\mathrm{.}7\%$ and the interest is paid on

every $31$ December. The market price of the shares in the following year is shown below:

Show the calculation where the preference shares are measured at:

i$.$ Amortized cost.

ii$.$ Fair value through profit or loss.

Prepare the relevant journal entries for both measurements. Refer to the journal entries

of the issuance of debentures in the lecture notes.