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Happy Sdn Bhd purchased a debt instrument on 1 January 2 0 2 3 at its fair value of RM 5 million. The face value
Happy Sdn Bhd purchased a debt instrument on January at its fair value of
RM million. The face value of the instrument was RM million with an interest rate
of The instrument will mature in three years time with a redemption value of
RM million. The market interest rate was Transaction cost amounted to
RM The directors wish to measure this transaction at amortised cost using
the effective interest rate method as it intends to hold the financial instrument to
maturity.
Required:
Discuss the accounting treatment in accordance with the relevant financial reporting
standards and where necessary, show how it should be disclosed in the financial
statements of Happy Sdn Bhd for the year ended December Please give calculation step by step in details.
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There are 3 Steps involved in it
Step: 1
To account for the debt instrument purchased by Happy Sdn Bhd we need to apply the relevant financial reporting standards specifically MFRS 9 Financial Instruments or the equivalent IFRS 9 According t...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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