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The whole world was facing an epidemic, COVID-19 in the year 2020. On March 15, the Malaysian government announced a special grant to purchase equipment for those who are willing to manufacture a special suits for the frontliners fighting the disease. YY Sdn Bhd applied for the grant and received the approval for RM30,000 to purchase the equipment on 20 March 2020. The equipment cost RM70,000 and YY began manufacturing the suits beginning 1 April 2020. The grant was received on 15 April 2020. The equipment was expected to have a useful life of 3 years with a scrap value of RM10,000. YY uses the writeoff against asset method. YY's year end is 30 June. They depreciate their equipment on a straight line basis.
Required:
Problem 1: Prepare the journal entries to record the purchase of the equipment, the grant and the depreciation for the year ended 30 June 2020.
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