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Answer Posted / anandsurya
The systematic allocation of the discount, premium, or
issue costs of a bond to expense over the life of the bond;
the systematic allocation of an intangible asset to expense
over a certain period of time; the systematic reduction of
a loan's principal balance through equal payment amounts
which cover interest and principal repayment.
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Explain howyou would account for the following items/situations,justifying answers by reference to the conceptual frameworks defintion and rcognition criteria. a)A trinket of sentimental value only b)You are the guarantor for your friends bank loan i) You have no reason to belive that your friend will default on the loan ii) As your friend is in serious financial dificulties,you think it is likely that he will default on the loan c)You receive 1000 shares in X Ltd,trading at $4 each,as a gift from a grateful client. d)The panoramic view of the coast from your cafes windows,which you are convinced attracts customers to your cafe
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