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Prepare journal entries for the transactions of shivay ltd

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Reference no: EM132972944

Problem 1: Prepare journal entries for the following transactions of Shivay Ltd.

  1. On 1 July 2021, Shivay Ltd purchases 10,000 shares in Rio Tinto Limited in an off-market transaction at $127 each. On this day, the average market price for a Rio Tinto share is $130. Shivay Ltd subsequently measures share investments at fair value through profit and loss.
  2. On 1 November 2021, Shivay Ltd borrows $300,000 from the National Australia Bank (NAB). The term of the loan is 4 years with a 3% market interest rate due annually. NAB charges $7,000 in legal costs for loan documentation.
  3. On 1 March 2022, Shivay Ltd buys 90 units of ASX SPI 200 futures with a contractual maturity of September 2022. Each contract unit is valued at $30 per index point. The values of ASX SPI 200 futures Index at 1 March 2022 and 30 June 2022 are $8,580,000 and $7,530,000 respectively. (Note: provide journal entry only for subsequent measurement on reporting date 30 June 2022).

Reference no: EM132972944

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