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MNO Ltd. has incurred costs of US$200,000 for the development of a new product. It has capitalised these costs in accordance with IAS 38. The
MNO Ltd. has incurred costs of US$200,000 for the development of a new product. It has capitalised these costs in accordance with IAS 38. The costs are amortised over its estimated useful life of 4 years. The carrying amount at end of 2007 is US$150,000. Current tax regulations allow development costs to be deductible at once when occurring and the Company is applying this. MNO is subject to corporate income tax as a normal company in Vietnam (2007, 2008: 28%, 2009 onward: 25%). Determine journal entries for 2008 and 2009.
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