A
Bell Ltd is an Australian company issued $10 million convertible notes on 1 July 2020 that carry a nominal interest (coupon) rate of 5% per annum. They are redeemable on 30 June 2023 for cash or can be exchanged for ordinary shares in Bell Ltd on the basis of 20 shares for each $100 of note. The prevailing market interest rate for the notes without conversion options are 8%.

Required:
Using the information above, explain and show how this event would be reported in the financial statement of Bell for the year ended 30 June 2021.
Note: Marks will be awarded for both figures and explanation

B
There are three possible measurement bases namely amortised cost, fair value through other comprehensive income and fair value through profit and loss are identified by AASB 9 – Financial Instruments in the classification and measurement of financial Assets.

Required:
Explain how the AASB 9 requires entities to select the appropriate measurement basis for a financial asset. You should include any options available to entities regarding classification in your explanation.
Note: You are NOT required to define a financial asset.

C
On 20 July 2020, Corona Ltd an Australian based company provides some management consulting service to a company in Unites States of America called XYZ Incorporation for an agreed fee of US$1.5 million. The amount is paid into the US bank account of Corona Ltd onPage 4 of 10 20 July 2020. Corona Ltd elects to leave the amount in the US bank account, which pays interest each year on 30 June at a rate of five per cent. The relevant exchange rates are:
20 July 2020 A$1.00 = US$0.75
30 June 2021 A$1.00 = US$0.78

Required:
Provide the journal entries that would need to be made in the books of Corona Ltd to account for the above transaction for the year ending 30 June 2021.