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On 1 July 2008, Roos Limited Issues $3 Million in Ten

Question 44

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On 1 July 2008, Roos Limited issues $3 million in ten year, 8 per cent annual debentures to Hall Limited. The market required rate of return on the debentures at the time is 12 per cent. On 1 July 2010, Hall Limited decided to forgive the debt owed by Roos Limited, and so cancels the debt. Assuming Roos Limited uses the straight-line method to amortise the debenture discount, what is the journal entry passed in the books of Roos Limited at 1 July 2010?:


A) On 1 July 2008, Roos Limited issues $3 million in ten year, 8 per cent annual debentures to Hall Limited. The market required rate of return on the debentures at the time is 12 per cent. On 1 July 2010, Hall Limited decided to forgive the debt owed by Roos Limited, and so cancels the debt. Assuming Roos Limited uses the straight-line method to amortise the debenture discount, what is the journal entry passed in the books of Roos Limited at 1 July 2010?: A) B) C) D) E) None of the given answers.
B) On 1 July 2008, Roos Limited issues $3 million in ten year, 8 per cent annual debentures to Hall Limited. The market required rate of return on the debentures at the time is 12 per cent. On 1 July 2010, Hall Limited decided to forgive the debt owed by Roos Limited, and so cancels the debt. Assuming Roos Limited uses the straight-line method to amortise the debenture discount, what is the journal entry passed in the books of Roos Limited at 1 July 2010?: A) B) C) D) E) None of the given answers.
C) On 1 July 2008, Roos Limited issues $3 million in ten year, 8 per cent annual debentures to Hall Limited. The market required rate of return on the debentures at the time is 12 per cent. On 1 July 2010, Hall Limited decided to forgive the debt owed by Roos Limited, and so cancels the debt. Assuming Roos Limited uses the straight-line method to amortise the debenture discount, what is the journal entry passed in the books of Roos Limited at 1 July 2010?: A) B) C) D) E) None of the given answers.
D) On 1 July 2008, Roos Limited issues $3 million in ten year, 8 per cent annual debentures to Hall Limited. The market required rate of return on the debentures at the time is 12 per cent. On 1 July 2010, Hall Limited decided to forgive the debt owed by Roos Limited, and so cancels the debt. Assuming Roos Limited uses the straight-line method to amortise the debenture discount, what is the journal entry passed in the books of Roos Limited at 1 July 2010?: A) B) C) D) E) None of the given answers.
E) None of the given answers.

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