Calculate the amount of financial liability

Assignment Help Accounting Basics
Reference no: EM133124067

Question - Smith Ltd issues 100,000 $1 redeemable convertible notes. The notes pay interest at 5% per annum. Each note converts at any time at the option of the holder into one ordinary share. The notes are redeemable at the option of the issuer for cash after 5 years. If after 5 years the notes have not been redeemed or converted, they cease to carry interest. Market rates for similar notes without the conversion option are 7% per annum.

Required - In accordance with AASB 132 Financial Instruments: Presentation:

(a) Calculate the amount of financial liability if Smith Ltd needs to record any financial liability. Give reasons to support your answer.

(b) Calculate the amount of equity instrument if Smith Ltd needs to record any equity instrument. Give reasons to support your answer.

Reference no: EM133124067

Questions Cloud

Big idea discussion-based assessment : What's the Big Idea Discussion-Based Assessment
Prepare journal entries to record merchandising transactions : Prepare journal entries to record the following merchandising transactions of Lowe's, which uses the perpetual inventory system and the gross method
Preconditions a caribbean country : What are some preconditions a Caribbean country can put n place before introducing technology?
Prepare the accounts for french taste : In accordance with AASB15 Revenue from contracts with customers, prepare the accounts for French Taste when each cup of coffee is sold
Calculate the amount of financial liability : Calculate the amount of financial liability if Smith Ltd needs to record any financial liability. Give reasons to support your answer
How does the economy affects our everyday life : Write a small essay on how does the economy affects our everyday life?
Determine inventory cost by the first-in, first-out method : There are 13 units of the item in the physical inventory at December 31. The periodic Inventory system is used. Determine Inventory cost
Find the apr for the loan : Question - Nelly purchase a refrigerator for $2,100 at 18% add-on interest for 3years, with monthly payment. Find the APR for the loan
New year eve count-down lighting system : You work at a company that is making the New Year's Eve count-down lighting system or a small town. Yours boss ask you to design a system that will start counti

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd