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Accounting for loan assets at amortised cost Finale Ltd is a manufacturing company that makes...

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Accounting for loan assets at amortised cost Finale Ltd is a manufacturing company that makes loans to other parties from time to time. The loan assets are classified by Finale Ltd as subsequently measured at amortised cost. Finale Ltd does not apply the simplified approach to impairment of loans receivable. In accounting for impairment losses, Finale Ltd classifies all loans as remaining at stage 1 from inception to maturity. On 1 July 2022, Finale Ltd made the following loans: (a) A 3-year loan of $1 million to Grate Ltd at an interest rate of 11% p.a. due annually in arrears on 30 June each year. Grate Ltd incurred transaction costs of $97 749 in respect of this loan to arrange charges for security. Finale Ltd estimates 12-months expected credit loss as $20 000. (b) A 3-year loan of $1 million to American Ltd at an interest rate of 9.1393% p.a. with interest due only on settlement at 30 June 2022. Finale Led estimates 12-months expected credit loss as $10000. Required Prepare the entries of Finale Ltd to account for the three loans from initial recognition on 1 July 2022 to derecognition on 30 June 2025, assuming loans are paid in full on maturity

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