According to relevant accounting standards, prepare journal entries to recognise the transactions of Entity A from 1 July 2018 to 30 June 2021.
Entity A is listed in Hong Kong. It is a toy manufacturer which commenced its business more than thirty years.
On 1 July 2018, Entity A bought a $3,500,000 5.25% bond for $3,650,000. It also incurred an issue cost of $2,312. Entity A paid the
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 2019 $3,980,000
- 30 June 2020 $3,560,000
- 30 November 2020 $3,250,000
- 31 December 2020 $3,350,000
- 30 June 2021 $4,365,400
The effective interest rate is 8.25%. The
REQUIRED:
According to relevant accounting standards, prepare journal entries to recognise the transactions of Entity A from 1 July 2018 to 30 June 2021.
ACCOUNTS FOR INPUT:
| Financial asset (Amortised Cost) | Financial asset (FVTPL) | Financial asset (FVTOCI) |
| Financial liability | Equity instrument | Transaction cost | Bank | Loss allowance | Impairment loss | Reversal of impairment loss |
| Gain on remeasurement (P/L) | Loss on remeasurement (P/L) | Gain on remeasurement (OCI) | Loss on remeasurement (OCI) |
| Payable | Receivable | Other income | Other expense | Reclassification (P/L) | Reclassification (OCI) |
| Interest expense | Interest revenue | Loss on disposal | Gain on disposal |
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