Prepare the entries of last ltd to account for this loan

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Question - Last Ltd is a manufacturing company that makes loans to other parties from time to time. The loan assets are classified by Last Ltd as subsequently measured at amortized cost.

On 1 July 2016, Last Ltd made the following loan:

A 3-year loan of $1 million to Grate Ltd at 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.

Required: Prepare the entries of Last Ltd to account for this loan from initial recognition on 1 July 2016 to de-recognition on 30 June 2019, showing all calculations.

Reference no: EM132081073

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