On 1 July 2020, Sharp Ltd purchased a debenture in Soft Ltd with a 5 year term for $20.000. The transaction costs for brokerage was $500. The debenture has a face value of $25,000 and offers an interest return of $3% payable on 30 June each year. The prevailing market rate of return is 4%. In accordance with its business model, Sharp Ltd measures the debenture at amortised cost. Required: Prepare the journal entries to be recognised within the financial year ended on 30 June 2021. how all calculations.
On 1 July 2020, Sharp Ltd purchased a debenture in Soft Ltd with a 5 year term for $20.000. The transaction costs for brokerage was $500. The debenture has a face value of $25,000 and offers an interest return of $3% payable on 30 June each year. The prevailing market rate of return is 4%. In accordance with its business model, Sharp Ltd measures the debenture at amortised cost. Required: Prepare the journal entries to be recognised within the financial year ended on 30 June 2021. how all calculations.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On 1 July 2020, Sharp Ltd purchased a debenture in Soft Ltd with a 5 year term
for $20.000. The transaction costs for brokerage was $500. The debenture has a
face value of $25,000 and offers an interest return of $3% payable on 30 June
each year. The prevailing market rate of return is 4%. In accordance with its
business model, Sharp Ltd measures the debenture at amortised cost.
Required:
Prepare the journal entries to be recognised within the financial year ended on 30
June 2021. how all calculations.
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