Solved

Practical Ltd Issued $100,000 in 4-Year, 6 Per Cent Annual

Question 47

Multiple Choice

Practical Ltd issued $100,000 in 4-year, 6 per cent annual debentures for Theoretical Ltd on 1 July 2002. The market required rate of return on the debentures at the time of issue was 8 per cent. Theoretical Ltd decides to forgive the debt on 1 July 2004. Any premium or discount is amortised straight-line. What is the entry in the books of Theoretical Ltd to record the forgiveness of the debt?


A) Practical Ltd issued $100,000 in 4-year, 6 per cent annual debentures for Theoretical Ltd on 1 July 2002. The market required rate of return on the debentures at the time of issue was 8 per cent. Theoretical Ltd decides to forgive the debt on 1 July 2004. Any premium or discount is amortised straight-line. What is the entry in the books of Theoretical Ltd to record the forgiveness of the debt? A) B) C) D) E) None of the given answers.
B) Practical Ltd issued $100,000 in 4-year, 6 per cent annual debentures for Theoretical Ltd on 1 July 2002. The market required rate of return on the debentures at the time of issue was 8 per cent. Theoretical Ltd decides to forgive the debt on 1 July 2004. Any premium or discount is amortised straight-line. What is the entry in the books of Theoretical Ltd to record the forgiveness of the debt? A) B) C) D) E) None of the given answers.
C) Practical Ltd issued $100,000 in 4-year, 6 per cent annual debentures for Theoretical Ltd on 1 July 2002. The market required rate of return on the debentures at the time of issue was 8 per cent. Theoretical Ltd decides to forgive the debt on 1 July 2004. Any premium or discount is amortised straight-line. What is the entry in the books of Theoretical Ltd to record the forgiveness of the debt? A) B) C) D) E) None of the given answers.
D) Practical Ltd issued $100,000 in 4-year, 6 per cent annual debentures for Theoretical Ltd on 1 July 2002. The market required rate of return on the debentures at the time of issue was 8 per cent. Theoretical Ltd decides to forgive the debt on 1 July 2004. Any premium or discount is amortised straight-line. What is the entry in the books of Theoretical Ltd to record the forgiveness of the debt? A) B) C) D) E) None of the given answers.
E) None of the given answers.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q5: Insubstance debt defeasance refers to an arrangement

Q8: If the conditions for set off were

Q19: The changes under AASB 132 have removed

Q22: Insubstance debt defeasance is no longer allowed

Q25: The conditions that were required by the

Q27: In a set-off,the gearing ratio of the

Q32: Which of the following statements is correct

Q37: Which of the following statements is correct

Q39: The "Offsetting" in AASB 132 "Financial Instruments:

Q41: Lynne and Tom Ltd's statement of financial