1. Discuss the accounting processes, calculations, and reason for these consolidation entries you have made for the Motor vehicle and all the related accounts, including Depreciation30/06/2022Accumulated depreciation - Motor vehicleDR30000 Motor vehicleCR15000 Deferred tax liabilityCR4500 Business combination valuation reserveCR10500 30/06/2022Depreciation expense - Motor VehicleDR3000 Retained earnings (1/7/21)DR3000 Accumulated depreciation - Motor VehicleCR6000 ($15000/5 p.a. for 2 years) 2. Bowie Ltd provided David Ltd with a loan for $425,000 in June 2021 with 15% interest rate annually. Explain the accounting processes, calculations and reason for these consolidation entries.30/06/2022Loan payableDR425000 Loan receivableCR425000 30/06/2022Interest RevenueDR63750 Interest ExpenseCR63750 30/06/2022Interest PayableDR63750 Interest ReceivableCR63750 please solve both the questions.

Bowie Ltd has provided a loan to the David Ltd company for $425,000 in June 2021 and the interest…

Answered: Bowie Ltd provided David Ltd with a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Discuss the accounting processes, calculations, and reason for these consolidation entries you have made for the Motor vehicle and all the related accounts, including Depreciation

30/06/2022	Accumulated depreciation - Motor vehicle	DR	30000
	Motor vehicle	CR	15000
	Deferred tax liability	CR	4500
	Business combination valuation reserve	CR	10500

30/06/2022	Depreciation expense - Motor Vehicle	DR	3000
	Retained earnings (1/7/21)	DR	3000
	Accumulated depreciation - Motor Vehicle	CR	6000
	($15000/5 p.a. for 2 years)

2. Bowie Ltd provided David Ltd with a loan for $425,000 in June 2021 with 15% interest rate annually. Explain the accounting processes, calculations and reason for these consolidation entries.

30/06/2022	Loan payable	DR	425000
	Loan receivable	CR	425000

30/06/2022	Interest Revenue	DR	63750
	Interest Expense	CR	63750

30/06/2022	Interest Payable	DR	63750
	Interest Receivable	CR	63750

please solve both the questions.

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