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COURSE: DIPLOMA IN ACCOUNTING / SUBJECT: TAXATIONChapter 3 Tutorial - Part 1 : Issuance / Terbitan On 1 s t January 2 0 2 0

COURSE: DIPLOMA IN ACCOUNTING /SUBJECT: TAXATIONChapter 3 Tutorial - Part 1: Issuance/Terbitan
On 1st January 2020, Aroi Bhd issued 10 million 3% redeemable preference shares at
RM1.10 each, redeemable at a premium of 5.3% on 31 December 2022. Interest is
payable on paid-up capital. The effective interest rate is 4.7% 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.
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