Question
EXPLAIN and show how the following transactions would be reported in the financial statements: On 1 April 2018, DT subscribed for 40 million RM 1
EXPLAIN and show how the following transactions would be reported in the financial statements:
On 1 April 2018, DT subscribed for 40 million RM 1 loan notes in Eps. The loan notes were issued at 90 cents and under the terms of issue were redeemable at RM 1.20 on 31 March 2020. Interest is payable on 31 March in arrears at 4% of par value. This represents an effective annual rate of return for DT of 9.9%. DTs intention is to hold the loan notes until redemption. Until 31 October 2019 Eps was a successful company with a good reputation for settling all its liabilities on their due dates. However, due to an event which occurred on 31 October 2019, three of Epss major customers became insolvent and this caused liquidity problems for Eps. During November 2019 Eps entered into negotiations with all its creditors, including DT. DT agreed to forego the interest payments due on 31 March 2019 and 2020, with the payments from 31 March 2021 onwards resuming as normal.
Kindly answer in Microsoft word. not interested the answers on Chegg already.
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