On 1 July 2004 Waugh Ltd Enters into an Arrangement

question 37

Multiple Choice

On 1 July 2004 Waugh Ltd enters into an arrangement with a US bank - Big Bank - to borrow US$900,000. The term of the loan is 3 years with interest payable annually in arrears on 30 June at the rate of 10 per cent. The exchange rate information is:

What journal entries are required in Waugh Ltd's books for 1 July 2004 and 30 June 2005 in accordance with AASB 121 (rounded to the nearest whole $A) ?

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Definitions:

FMVSS-121

A specific Federal Motor Vehicle Safety Standard related to air brake systems in heavy-duty trucks and buses, regulating performance and reliability.

Compressed Air Reservoir

A tank or container designed to hold compressed air at a desired pressure, used in pneumatic systems for energy storage or distribution.

Air Brakes

Pneumatically actuated brakes used on most heavy-duty trucks. These brakes use air pressure to brake the vehicle by means of diaphragms, levers, S-cams, wedges, and rotor assemblies.

Safety Pressure Relief Valve

A term used to describe the pressure relief valve used on truck air brake systems more often known as a pop-off valve. Most pop-off valves are set to trip at 150 psi and are located on the supply (wet) tank in the system.