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On 1 July 2016 McGrath Ltd Enters into an Arrangement

Question 64

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On 1 July 2016 McGrath Ltd enters into an arrangement with a Hong Kong bank to borrow $HK1 500 000.The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 7 per cent.The exchange rate information is:  1 July 2016 A$1 = $HK4.25 30 June 2017 A$1 = $HK3.50 30 June 2018 A$1 = $HK4.50 \begin{array} { | l | l | } \hline \text { 1 July } 2016 & \text { A\$1 } = \text { \$HK4.25 } \\\hline 30 \text { June } 2017 & \text { A\$1 } = \text { \$HK3.50 } \\\hline 30 \text { June } 2018 & \text { A\$1 } = \text { \$HK4.50 } \\\hline\end{array} What journal entries are required in McGrath Ltd's books for 1 July 2016 and 30 June 2017 and 30 June 2018 in accordance with AASB 121 (rounded to the nearest whole A$) ?


A)
On 1 July 2016 McGrath Ltd enters into an arrangement with a Hong Kong bank to borrow $HK1 500 000.The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 7 per cent.The exchange rate information is: \begin{array} { | l | l | } \hline \text { 1 July } 2016 & \text { A\$1 } = \text { \$HK4.25 } \\ \hline 30 \text { June } 2017 & \text { A\$1 } = \text { \$HK3.50 } \\ \hline 30 \text { June } 2018 & \text { A\$1 } = \text { \$HK4.50 } \\ \hline \end{array} What journal entries are required in McGrath Ltd's books for 1 July 2016 and 30 June 2017 and 30 June 2018 in accordance with AASB 121 (rounded to the nearest whole A$) ? A) B) C) D)
B)
On 1 July 2016 McGrath Ltd enters into an arrangement with a Hong Kong bank to borrow $HK1 500 000.The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 7 per cent.The exchange rate information is: \begin{array} { | l | l | } \hline \text { 1 July } 2016 & \text { A\$1 } = \text { \$HK4.25 } \\ \hline 30 \text { June } 2017 & \text { A\$1 } = \text { \$HK3.50 } \\ \hline 30 \text { June } 2018 & \text { A\$1 } = \text { \$HK4.50 } \\ \hline \end{array} What journal entries are required in McGrath Ltd's books for 1 July 2016 and 30 June 2017 and 30 June 2018 in accordance with AASB 121 (rounded to the nearest whole A$) ? A) B) C) D)
C)
On 1 July 2016 McGrath Ltd enters into an arrangement with a Hong Kong bank to borrow $HK1 500 000.The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 7 per cent.The exchange rate information is: \begin{array} { | l | l | } \hline \text { 1 July } 2016 & \text { A\$1 } = \text { \$HK4.25 } \\ \hline 30 \text { June } 2017 & \text { A\$1 } = \text { \$HK3.50 } \\ \hline 30 \text { June } 2018 & \text { A\$1 } = \text { \$HK4.50 } \\ \hline \end{array} What journal entries are required in McGrath Ltd's books for 1 July 2016 and 30 June 2017 and 30 June 2018 in accordance with AASB 121 (rounded to the nearest whole A$) ? A) B) C) D)
D)
On 1 July 2016 McGrath Ltd enters into an arrangement with a Hong Kong bank to borrow $HK1 500 000.The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 7 per cent.The exchange rate information is: \begin{array} { | l | l | } \hline \text { 1 July } 2016 & \text { A\$1 } = \text { \$HK4.25 } \\ \hline 30 \text { June } 2017 & \text { A\$1 } = \text { \$HK3.50 } \\ \hline 30 \text { June } 2018 & \text { A\$1 } = \text { \$HK4.50 } \\ \hline \end{array} What journal entries are required in McGrath Ltd's books for 1 July 2016 and 30 June 2017 and 30 June 2018 in accordance with AASB 121 (rounded to the nearest whole A$) ? A) B) C) D)

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