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QUESTION 4 Entity A is listed in Hong Kong. It is a toy manufacturer which commenced its business more than thirty years ago. July 2

QUESTION 4
Entity A is listed in Hong Kong. It is a toy manufacturer which commenced its business more than thirty years ago.
July 2020. Fixed interest is received in arrears. The bond will be redeemed at par or premium or discount over its face value on 30 June 2023.
Entity A intended to hold the bond until maturity. The fair value option was not elected at the initial recognition.
The fair values of the bond were as follows:
30 June 2021,$73,980,000
30 June 2022,$63,560,000
30 November 2022$73,250,000
31 December 2022$73,350,000
30 June 2023,$74,365,400
The effective interest rate is 7.75%. The market environment is stable and credit risk-free. The end of the reporting period is 30 June.
REQUIRED:
According to relevant acoounting standards, prepare journal entries to recognise the transactions of Entity A from 1 July 2020 to 30 June 2023.
ACCOUNTS FOR INPUT:
| Financial asset (Amortised Cost)| Financial asset (FVTPL)| Financial asset (FVTOCI)|
| Financial liablity | Equity instrument | Transaction cost | Bank | Loss allowance | Impaiment loss | Reversal of impairment loss |
| Gain on remeasurement (P/L)| Loss on remeasurement (P/L)| Gain on remeasurement (OCl)| Loss on remeasurement (OCI)|
| Payable | Recelvable | Other income | Other expense | Reclassification (P/L)| Reclassification (OCI)|
| Interest expense | Interest revenue | Loss on disposal | Gain on disposal | Retained earnings | No entry |
ANSWERS:
Journal Entries:
Date
1-Jul-20
16- Jul-20
30-Jun-21
30-Jun-22
30-Jun-23
30-Jun-23
Account Name
Debit ($)
Hints For Sequence
Non-Asset. Judge DriCr.
Judge Dr/Cr.
Non-Income. Judge DriCr.
Non-Income. Judge DriCr.
Non-Income. Judge Dr/C
Judge Dr/Cr.
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