Homework Answers
| Year | Cash Inflow | PV factor @ 15% | Present value |
| 1 | 14740 | 0.884955752 | 13044.25 |
| 2 | 14740 | 0.783146683 | 11543.58 |
| 3 | 14740 | 0.693050162 | 10215.56 |
| 4 | 14740 | 0.613318728 | 9040.32 |
| 5 | 14740 | 0.542759936 | 8000.28 |
| 6 | 14740 | 0.480318527 | 7079.90 |
| 7 | 14740 | 0.425060644 | 6265.39 |
| 8 | 14740 | 0.376159862 | 5544.60 |
| 9 | 14740 | 0.332884833 | 4906.72 |
| 10 | 148740 | 0.294588348 | 43817.07 |
| Total | 119457.67 |
Therefore Journal entry IFRS would be
| No | Date | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | 12/31/2017 | Cash | $134000 | |
| Bonds Payable | $119458 | |||
| Additional Paid in Capital - Convertible Bonds | $14542 |
Therefore Journal entry US GAAP would be
| No | Date | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | 12/31/2017 | Cash | $134000 | |
| Bonds Payable | $134000 |
Entry required to convert IFRS to US GAAP
| No | Date | General Journal | Debit | Credit |
|---|---|---|---|---|
| 1 | 12/31/2017 | Additional Paid in Capital - Convertible Bonds | $14542 | |
| Bonds Payable | $14542 |
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CH11Question5
Parnell Company acquired construction equipment on January 1,
2017, at a cost of $72,000. The equipment was expected to have a
useful life of four years and a residual value of $11,000 and is
being depreciated on a straight-line basis. On January 1, 2018, the
equipment was appraised and determined to have a fair value of
$67,100, a salvage value of $11,000, and a remaining useful life of
three years. In measuring property, plant, and equipment subsequent
to acquisition...
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