MNO Ltd. has incurred costs of US$200,000 for the development of a new product. It has capitalised these costs in accordance with AS 38. The costs are amortised over its estimated useful life of 4 years. The carrying amount at end of 2007 is US$150,000.

Current tax regulations allow development costs to be deductible at once when occuring and the Company is applying this.

MNO is subject to corporate income tax as a normal company in Vietnam (2007, 2008: 28%, 2009 onward: 25%).

Record journal entries for 2008 and 2009.

Answer rating: 100% (QA)

Journal Entries for 2008 Debit Development Costs Asset US200000 Credit CashBank US2000... View the full answer