On 1 January 2017, Alpad Berhad issued 60 million 5% Redeemable Preference Shares for RM40 million. These shares are redeemable in four years' time at a Premium of 13.5%. The effective interest rate is 8%. Alpad Berhad measures the Preference Shares at Amortized Cost. Required: (a) Prepare the journal entries to record the issuance then Amortized Cost of Premium from 31 December 2017 to 31 December 2020. (b) Prepare the Redeemable Preference Shares Account at the Statements of Financial Position from the years 31 December 2017 to 31 December 2020.
On 1 January 2017, Alpad Berhad issued 60 million 5% Redeemable Preference Shares for RM40 million. These shares are redeemable in four years' time at a Premium of 13.5%. The effective interest rate is 8%. Alpad Berhad measures the Preference Shares at Amortized Cost. Required: (a) Prepare the journal entries to record the issuance then Amortized Cost of Premium from 31 December 2017 to 31 December 2020. (b) Prepare the Redeemable Preference Shares Account at the Statements of Financial Position from the years 31 December 2017 to 31 December 2020.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On 1 January 2017, Alpad Berhad issued 60 million 5% Redeemable Preference Shares for RM40 million.
These shares are redeemable in four years' time at a Premium of 13.5%.
The effective interest rate is 8%.
Alpad Berhad measures the Preference Shares at Amortized Cost.
Required:
(a) Prepare the journal entries to record the issuance then Amortized Cost of Premium from 31 December
2017 to 31 December 2020.
(b) Prepare the Redeemable Preference Shares Account at the Statements of Financial Position from the
years 31 December 2017 to 31 December 2020.
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