(b) MerryHeart Ltd commenced construction of a machine for greeting cards on 1 September 2018. On...

 

Transcribed Image Text:

(b) MerryHeart Ltd commenced construction of a machine for greeting cards on 1 September 2018. On 1 October 2018, it borrowed $3 million at an annual interest rate of 8% to finance the development. On 15 February 2018, the workers went on strike and no work was done until the dispute was settled on 15 April 2018. The project was still in progress at 30 June 2019. Interest was determined on a monthly basis and paid on the second day of each month. Required: Show how the above transaction and events up to 30 June 2019 should be recorded by one journal entry. (4 marks) (Total 20 marks) (b) MerryHeart Ltd commenced construction of a machine for greeting cards on 1 September 2018. On 1 October 2018, it borrowed $3 million at an annual interest rate of 8% to finance the development. On 15 February 2018, the workers went on strike and no work was done until the dispute was settled on 15 April 2018. The project was still in progress at 30 June 2019. Interest was determined on a monthly basis and paid on the second day of each month. Required: Show how the above transaction and events up to 30 June 2019 should be recorded by one journal entry. (4 marks) (Total 20 marks)