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Hi,
When bond issuing, how do we recognise the cost of issue and discountRecognise Cost of issue is a asset and amortise it
or deduct it like discount to arrive the final liablities like loan or redeemable share
Recognise as an asset and depreciate …… but there’s a lot of controversy about it. For example, is it an asset?
thank you alot, to day i do a kit and got stuck in this problem ” Trade in allowance “, i search the book of bpp and can find the explanation
” Old equipment that had cost 6ml and replace with new eqip had gross cost 8mil, the equipment manufacture allow ” trade in allowance ” for 0.5ml.Is the ” trade in allowance ” = cost of equip 6ml – acc’dep’ – trade in value
and would you please clearly explain the record transaction in this case.
When you sell your car and buy a new one, you could go to the garage and ask “How much is this new car?” Let’s say it’s $20,000
Ok, then you say to the sales person “How much will you deduct from the $20,000 if I give you my old car?”
The sales person says “$4,000” so you give away the old car and you pay $16,000 and drive away with a new car
The trade-in allowance is the $4,000 that you were “allowed” to deduct from the cost of the new car. It’s instead of selling the old one for cash and then having to pay the full $20,000
Ok?
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