tut10.docx - UNIVERSITI TUNKU ABDUL RAHMAN FACULTY OF...

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UNIVERSITI TUNKU ABDUL RAHMAN FACULTY OF ACCOUNTANCY AND MANAGEMENT ACADEMIC YEAR 2018 BACHELOR OF ACCOUNTING (HONS) UKAF2093 FINANCIAL REPORTING TUTORIAL 10 QUESTIONS MFRS 132 FINANCIAL INSTRUMENT ________________________________________________________________________ Lazar and Huang (2014) 7. (Q1/34) On 1.1.x4 XYZ issued RM10m 5% convertible loan notes maturing on 1.1.x7. The holder has the option to either accept cash or convert the holdings into ordinary shares on maturity date. The term of conversion is that RM100 of loan note can be converted into 40 ordinary shares at the end of the loan term which is 1.1.x7. At the date of the issue, the market interest rate on non-convertible loans was 10%. Required: show the following – a. Journal entries to record the issue of the financial instruments b. Extract of the SCI and SFP for the year x4 to x6 c. Journal entries on 1.1.x7, assuming 30% of the holders of the financial instruments chose to accept cash. 8. (Q2/34) On 1.1.x3, Robin issued RM20m zero-coupon interest rate loan notes maturing on 1.1.x8. These loan notes are redeemable at a premium of 50%. At the time of
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