Hande Bhd sells and distributes medical supplies to hospitals and pharmacies. The company closes its accounts on
Question:
Hande Bhd sells and distributes medical supplies to hospitals and pharmacies. The company closes its accounts on 31 December each year and uses an effective interest method to amortise bond premium or discount. The following are the selected transactions on the books of Hande Bhd for the financial year 2019.
REQUIRED:
(Round all numbers to the nearest RM)
(a) Determine the price of the (i) callable bonds and (ii) sukuk-bonds on the issuance date. Prepare the bond amortisation schedule for the callable bonds.
(b) Prepare all the related journal entries for Hande Bhd for the financial year 2019.
(c) Hande Bhd believes that financial liabilities such as bonds should not be measured at fair value but at amortised cost. Briefly explain whether the fair value option for financial liabilities is relevant for Hande Bhd.