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QUESTION $4$

Entity A is listed in Hong Kong. It is a toy manufacturer which commenced its business more than thirty years ago.

July $2020.$ Fixed interest is received in arrears. The bond will be redeemed at par or premium or discount over its face value on $30$ June $2023.$

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 $2021,$$$73,980,000$

$30$ June $2022,$$$63,560,000$

$30$ November $2022$$$73,250,000$

$31$ December $2022$$$73,350,000$

$30$ June $2023,$$$74,365,400$

The effective interest rate is $7\mathrm{.}75\%.$ The market environment is stable and credit risk$-$free. The end of the reporting period is $30$ June.

REQUIRED:

According to relevant acoounting standards, prepare journal entries to recognise the transactions of Entity A from $1$ July $2020$ to $30$ June $2023.$

ACCOUNTS FOR INPUT:

$|$ Financial asset $($Amortised Cost$)|$ Financial asset $($FVTPL$)|$ Financial asset $($FVTOCI$)|$

$|$ Financial liablity $|$ Equity instrument $|$ Transaction cost $|$ Bank $|$ Loss allowance $|$ Impaiment loss $|$ Reversal of impairment loss $|$

$|$ Gain on remeasurement $($P$/$L$)|$ Loss on remeasurement $($P$/$L$)|$ Gain on remeasurement $($OCl$)|$ Loss on remeasurement $($OCI$)|$

$|$ Payable $|$ Recelvable $|$ Other income $|$ Other expense $|$ Reclassification $($P$/$L$)|$ Reclassification $($OCI$)|$

$|$ Interest expense $|$ Interest revenue $|$ Loss on disposal $|$ Gain on disposal $|$ Retained earnings $|$ No entry $|$

ANSWERS:

Journal Entries:

Date

$1-$Jul$-20$

$16-$ Jul$-20$

$30-$Jun$-21$

$30-$Jun$-22$

$30-$Jun$-23$

$30-$Jun$-23$

Account Name

Debit $($$$)$

Hints For Sequence

Non$-$Asset. Judge DriCr.

Judge Dr$/$Cr$.$

Non$-$Income. Judge DriCr.

Non$-$Income. Judge DriCr.

Non$-$Income. Judge Dr$/$C

Judge Dr$/$Cr$.$

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