User Account

All Pages

Prepare the journal entries to account for the bond

Assignment Help Financial Accounting
Reference no: EM132778934

Question - BA Limited is a company based in Melbourne, Australia. The year end is 30th June.

On 1 July 2019, BA Ltd acquired a 3 year fixed rate corporate bond which has been classified as amortised cost under IFRS 9 Financial Instruments. BA Ltd acquired the corporate bond for $480,000 and incurred $2,000 in transaction costs for the investment.

Details of the corporate bond are as follows:

Face value $500,000; Annual coupon rate 6% paid on 30th June each year.

Effective interest rate 7.3813%; Maturity date 30 June 2022.

The bond is not a designated hedge instrument.

Instead, holding the bond until its maturity date (30 June 2022). BA Ltd decided to sell the bond earlier to obtain the cash needed to invest in a new project. On 30 June 2021, BA Ltd received the annual coupon on the bond and then immediately sold the bond for $495,000.

Required - For the bond for the year ended 30 June 2021

a) Prepare the journal entries to account for the bond. Show all workings. Ignore the impact of tax.

b) Determine which inflows or outflows will appear in the statement of cash flows. Ensure your response includes both amounts and classification.

Reference no: EM132778934

Questions Cloud

Was your member in support or in opposition to the ahca : Was your member in support or in opposition to the AHCA? State three points that you would cover in support or opposition to your representative's position.
What will be overall gain or loss for alston corporation : If the stock ends up at P20, what will be your overall gain or loss? Assume you sell 100 shares of Alston Corporation short at P43. You also buy 40 call option
Traditional multinational firm and internationalizing SME : What do you perceive to be the critical differences between a traditional multinational firm and an internationalizing SME?
What will be overall gain or loss : If the stock ends up at P50, what will be your overall gain or loss? Assume you sell 100 shares of Levis Corporation short at P72. You also buy a 70 call option
Prepare the journal entries to account for the bond : Face value $500,000; Annual coupon rate 6% paid on 30th June each year. Prepare the journal entries to account for the bond
International business negotiation : How information sharing and the creative use of trade-offs can create joint gain and lead to an integrative agreement in an international business negotiation
What will be the value of the put option : 40 July put option is purchased for 6.50 on a stock selling at P35 per share. If the stock ends up on expiration at 38.75, what will be value of the put option
What is the intrinsic value of the fifty call : What is the intrinsic value? Assume a stock is selling for P48.50 with options available at 40, 50, and 60 strike prices. The 50 call option price is at P2.75.
Describe how information sharing in negotiations : Describe how information sharing in negotiations can contribute to a positive resolution of conflicts.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +91-977-207-8620

Phone: +91-977-207-8620

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd