Account for loan from initial recognition

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Reference no: EM131025605

Last Ltdis a manufacturing company that makes loans to other parties from time to time. The loan assets are classified byLast Ltdas subsequently measured atamortised cost.On 1 July 2016,Last Ltdmade the following loan:A 3-year loan of $1 million to Grate Ltdat an interest rate of 15% p.a. due annually in arrears on 30 June each year.

Last Ltd incurred transaction costs of $97,749 in respect of this loan to arrange charges for security. Prepare the entries of Last Ltd to account for this loan from initial recognition on 1 July 16 to de recognition on 30 June 2019.

Reference no: EM131025605

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