On 1 July 2014 Waugh Ltd enters into an arrangement with a US bank-Big Bank-to borrow US$900 000.The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 10 per cent.The exchange rate information is: $$\begin{array} { | l | l | }
\hline 1 \text { July } 2014 & \text { A\$1 } = \text { US\$0.45 } \
\hline 30 \text { June } 2015 & \text { A\$1 } = \text { US\$0.55 } \
\hline
\end{array}$$ What journal entries are required in Waugh Ltd's books for 1 July 2014 and 30 June 2015 in accordance with AASB 121 (rounded to the nearest whole A$)?

Question

On 1 July 2014 Waugh Ltd enters into an arrangement with a US bank-Big Bank-to borrow US$900 000.The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 10 per cent.The exchange rate information is: $$\begin{array} { | l | l | } 
\hline 1 \text { July } 2014 & \text { A\$1 } = \text { US\$0.45 } \
\hline 30 \text { June } 2015 & \text { A\$1 } = \text { US\$0.55 } \
\hline
\end{array}$$ What journal entries are required in Waugh Ltd's books for 1 July 2014 and 30 June 2015 in accordance with AASB 121 (rounded to the nearest whole A$)?

Quizplus · Accepted Answer

The Answer of On 1 July 2014 Waugh Ltd enters into an arrangement with a US bank-Big Bank-to borrow US$900 000.The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 10 per cent.The exchange rate information is: $$\begin{array} { | l | l | } 
\hline 1 \text { July } 2014 & \text { A\$1 } = \text { US\$0.45 } \
\hline 30 \text { June } 2015 & \text { A\$1 } = \text { US\$0.55 } \
\hline
\end{array}$$ What journal entries are required in Waugh Ltd's books for 1 July 2014 and 30 June 2015 in accordance with AASB 121 (rounded to the nearest whole A$)?

On 1 July 2014 Waugh Ltd Enters into an Arrangement