Copyright2010McGraw-HillAustraliaPtyLtdPPTsto.pptVIP

Copyright ? 2010 McGraw-Hill Australia Pty Ltd PPTs to accompany Deegan, Australian Financial Accounting 6e 35-* Worked Example 35.10—Solution (cont.) Accounting entries in the books of Lennox Ltd 01 July 2011 Dr Cash 1 250 000 Cr Foreign loan 1 250 000 [to recognise, at the 1 July 2011 spot rate, the initial loan received from the US company (1 250 000 = 1 000 000 ÷ 0.80)] There is no entry to recognise the swap as the fair value of the swap agreement is deemed to be zero on 1 July 2011 as shown in the table on previous slide The effect of the entering the swap means that Lennox Ltd i