Page 31 - 23. COMPILER QB - IND AS 109_32
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Date Particulars Debit Credit
To Preference Shares A/c 38,260
(Being interest as per EIR method recorded)
Preference shares A/c Dr. 150,000
31-Mar-20X6 To Bank A/c 150,000
(Being Dividend at the coupon rate of 10% paid to the
shareholders)
31-Mar-20X6 Finance cost A/c Dr. 20,506
To Preference Shares A/c 20,506
(Being interest as per EIR method recorded)
31-Mar-20X6 Equity Component of Preference shares A/c Dr. 977,233
To Equity Share Capital A/c 50,000
To Securities Premium A/c 927,233
(Being Preference shares converted in equity shares &
remaining equity component is recognised as securities
premium)
Q19 (May 20 – 10 Marks)
st
Blueberry Ltd entered into the following transactions during the year ended 31 March, 20X2:
(a) Entered into a speculative interest rate option costing Rs. 10,000 on 1st April, 20X0 to borrow Rs.
6,000,000 from Exon Bank commencing 30th June, 20X2 for 6 months at 4%.
The value of the option at 31st March.20X2 was Rs. 15,250.
(b) Purchased 6% debentures in Fox Ltd on 1st April, 20X1 (their issue date) for Rs. 150,000 as an
investment. Blueberry Ltd. intends to hold the debentures, until their redemption at a premium, in 5
years’ time. The effective rate of interest of the bond is 8%.
(c) Purchased 50,000 shares in Cox Ltd on 1st October, 20X2 for Rs. 3.50 each as an investment. The share
price on 31st March, 20X2 was Rs. 3.75.
Show the accounting treatment and relevant extracts from the financial statements for the year ended 31st
March, 20X2 of transactions related to financial instruments. Blueberry Ltd designates financial assets at fair
value through Profit or loss only when this is unavoidable.
SOLUTION
st
Balance Sheet as at 31 March, 20X2(Extracts)
Financial Assets: Rs.
Interest rate option (W.N.1) 15,250
6% Debentures in Fox Ltd. (W.N.2) 1,53,000
Shares in Cox Ltd. (W.N.3) 1,87,500
Statement of Profit and Loss (Extracts)
Finance Income:
Gain on interest rate option (W.N.1) 5,250
Effective interest on 6% Debentures (W.N.2) 12,000
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