Solved

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

Question 30

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

Q25: The conditions that were required by the

Q26: Debt extinguishment occurs when a liability can

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

Q28: Insubstance debt defeasance was defined in the

Q29: Which of the following is not one

Q31: A debt cannot be considered extinguished,and therefore

Q32: Which of the following statements is correct

Q33: AASB 132 allows for all types of

Q34: A legal defeasance may occur as a

Q35: The existence of a right to set