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Dear Tutor,
I have a question regarding the accounting entries for the calling of the guarantee:
DEBIT Financial liabilities $39.6m
CREDIT Profit or loss $39.6mWhy the entry is not for the amount $39.2, which would leave the amortisation of 0.4 also for the second year in the P/L?
Thank you.
Dear Tutor,
the question is from the BPP revision kit: Question No. 18 Coatmin.
Thank you.
Hi,
The journal is removing the $39.2 million that was recorded at the reporting date and also the amortisation of the fair value of the guarantee at $0.4 million.
I wouldn’t worry too much about this one though as it is a ridiculously hard question.
Thanks
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