Two companies enter into loan agreements on 1 July 2012.On that date they also enter into an agreement to swap the loans.The details for each company and loan are: $$\begin{array} { | l | l | }
\hline \text { Andre Ltd } & \text { Agassi Ltd } \
\hline \text { Australian company } & \text { Australian company } \
\hline \text { Borrows UK£1500 000 } & \text { Borrows A\$4 } 980000 \
\hline \text { Interest rate } 8 \% \text { payable annually } & \text { Interest rate } 11 \% \text { payable annually } \
\hline \text { Repayable in UK£ } & \text { Repayable in A\$ } \
\hline \text { Loan repayable in 3 years } & \text { Loan repayable in 3 years } \
\hline
\end{array}$$ Exchange rates:
$$\begin{array} { | l | l | }
\hline 1 \text { July } 2012 & \text { A\$1.00 } = \text { UK£ } 0.3012 \
\hline 30 \text { June } 2013 & \text { A\$1.00 } = \text { UK£.0.3150 } \
\hline
\end{array}$$ The balance date for both companies is 30 June 2013.What are the accounting entries in the books of Agassi Ltd on 1 July 2002 and 30 June 2013?

Question

Two companies enter into loan agreements on 1 July 2012.On that date they also enter into an agreement to swap the loans.The details for each company and loan are: $$\begin{array} { | l | l | } 
\hline \text { Andre Ltd } & \text { Agassi Ltd } \
\hline \text { Australian company } & \text { Australian company } \
\hline \text { Borrows UK£1500 000 } & \text { Borrows A\$4 } 980000 \
\hline \text { Interest rate } 8 \% \text { payable annually } & \text { Interest rate } 11 \% \text { payable annually } \
\hline \text { Repayable in UK£ } & \text { Repayable in A\$ } \
\hline \text { Loan repayable in 3 years } & \text { Loan repayable in 3 years } \
\hline
\end{array}$$ Exchange rates:
$$\begin{array} { | l | l | } 
\hline 1 \text { July } 2012 & \text { A\$1.00 } = \text { UK£ } 0.3012 \
\hline 30 \text { June } 2013 & \text { A\$1.00 } = \text { UK£.0.3150 } \
\hline
\end{array}$$ The balance date for both companies is 30 June 2013.What are the accounting entries in the books of Agassi Ltd on 1 July 2002 and 30 June 2013?

Quizplus · Accepted Answer

The Answer of Two companies enter into loan agreements on 1 July 2012.On that date they also enter into an agreement to swap the loans.The details for each company and loan are: $$\begin{array} { | l | l | } 
\hline \text { Andre Ltd } & \text { Agassi Ltd } \
\hline \text { Australian company } & \text { Australian company } \
\hline \text { Borrows UK£1500 000 } & \text { Borrows A\$4 } 980000 \
\hline \text { Interest rate } 8 \% \text { payable annually } & \text { Interest rate } 11 \% \text { payable annually } \
\hline \text { Repayable in UK£ } & \text { Repayable in A\$ } \
\hline \text { Loan repayable in 3 years } & \text { Loan repayable in 3 years } \
\hline
\end{array}$$ Exchange rates:
$$\begin{array} { | l | l | } 
\hline 1 \text { July } 2012 & \text { A\$1.00 } = \text { UK£ } 0.3012 \
\hline 30 \text { June } 2013 & \text { A\$1.00 } = \text { UK£.0.3150 } \
\hline
\end{array}$$ The balance date for both companies is 30 June 2013.What are the accounting entries in the books of Agassi Ltd on 1 July 2002 and 30 June 2013?

Two Companies Enter into Loan Agreements on 1 July 2012