3.�� HSCC started the business and issued 10,000 ordinary shares (pa.docx

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3. HSCC started the business and issued 10,000 ordinary �� shares (par value $2) at $20 per shares in 2015. The �� fiscal year is from January 1 to December 31 each year. On July 1, 2018, HSCC reacquires 1,000 shares of its ordinary shares at $30 per share (par value @$2). On October 1, 2018, HSCC issued a two-year callable financial instrument for $100,000. The rates of return for the first year and the second year are 1% and 2% respectively, payable annually at the end of each year. The rate of return for an instrument with similar credit risk but without a
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Unformatted text preview: redemption option is 1.2%. HSCC has the right to redeem the certificate of deposit at face value at any time before maturity. If the redemption does not occur, the holder will receive the amount of initial investment back at maturity. On November 1, 2018, the company announced and paid dividend of $1 per share. Required: Prepare the relevant journal entries for the fiscal year 2008. In your entry, specify whether the instrument issued on Oct 1 is an equity, a liability, or a compound instrument. �� [10 marks]...
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