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QUESTION 1 Entity A is listed in Hong Kong. It is a toy manufacturer which commenced its business more than thirty years ago. On 1
QUESTION Entity A is listed in Hong Kong. It is a toy manufacturer which commenced its business more than thirty years ago. On July Entity A bought a $ bond for $ It also incurred an issue cost of $ Entity A paid the bond price by a direct bank transfer on the purchase date. The issue cost was settled on July Fixed interest is received in advance. The bond will be redeemed at parpremiumdiscount over its face value on June Entity A may hold the bond until maturity. Entity A may also sell the bond if the bond price is attractive or for any other reason determined by the board of directors. The fair value option was not elected at the initial recognition. The fair values of the bond were as follows: Due to the cash shortage, on November the board of directors decided to sell the bond to an independent third party for $ and will sign the contract on December However, the bond buyer did not appear to sign the contract on December Finally, Entity A could not find any new buyers and it held the bond until maturity. The effective interest rate is The market environment is stable and credit riskfree. The end of the reporting period is June. REQUIRED: According to relevant accounting standards, prepare journal entries to recognise the transactions of Entity A from July to June ACCOUNTS FOR INPUT: Financial asset Amortised Cost Financial asset FVTPL Financial asset FVTOCl Financial liability Equity instrument Transaction cost Bank Loss allowance Impairment loss Reversal of impairment loss Gain on remeasurement PL Loss on remeasurement PL Gain on remeasurement Loss on remeasurement Payable Receivable Other income Other expense Reclassification PL Reclassification OCI Interest expense Interest revenue Loss on disposal Gain on disposal Retained earnings No entry ANSWERS: Journal Entries: Date Account Name Jul Jul Jul Jun Jun Jul Jun Jun Jul Nov Dec Jun Jun Jun Jun Debit $ Credit Hints For Sequence NonAsset. Judge DrCr Judge Dricr. Judge Dricr. Judge Dricr. Judge DriCr. Judge DriCr. Judge Dricr. Judge Dricr.
QUESTION
Entity A is listed in Hong Kong. It is a toy manufacturer which commenced its business more than thirty years ago.
On July Entity A bought a $ bond for $ It also incurred an issue cost of $ Entity A paid the bond
price by a direct bank transfer on the purchase date. The issue cost was settled on July Fixed interest is received in advance. The
bond will be redeemed at parpremiumdiscount over its face value on June
Entity A may hold the bond until maturity. Entity A may also sell the bond if the bond price is attractive or for any other reason determined by the
board of directors. The fair value option was not elected at the initial recognition.
The fair values of the bond were as follows:
Due to the cash shortage, on November the board of directors decided to sell the bond to an independent third party for $
and will sign the contract on December However, the bond buyer did not appear to sign the contract on December
Finally, Entity A could not find any new buyers and it held the bond until maturity.
The effective interest rate is The market environment is stable and credit riskfree. The end of the reporting period is June.
REQUIRED:
According to relevant accounting standards, prepare journal entries to recognise the transactions of Entity A from July to June
ACCOUNTS FOR INPUT:
Financial asset Amortised Cost Financial asset FVTPL Financial asset FVTOCl
Financial liability Equity instrument Transaction cost Bank Loss allowance Impairment loss Reversal of impairment loss
Gain on remeasurement PL Loss on remeasurement PL Gain on remeasurement Loss on remeasurement
Payable Receivable Other income Other expense Reclassification PL Reclassification OCI
Interest expense Interest revenue Loss on disposal Gain on disposal Retained earnings No entry
ANSWERS:
Journal Entries: Date
Account Name
Jul
Jul
Jul
Jun
Jun
Jul
Jun
Jun
Jul
Nov
Dec
Jun
Jun
Jun
Jun
Debit $
Credit
Hints For Sequence
NonAsset. Judge DrCr
Judge Dricr.
Judge Dricr.
Judge Dricr.
Judge DriCr.
Judge DriCr.
Judge Dricr.
Judge Dricr.
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