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Motion Ltd Issued $5 Million in Redeemable Preference Shares in a Private

Question 4

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Motion Ltd issued $5 million in redeemable preference shares in a private placement on 1 July 2012.The shares are redeemable on 30 June 2016,have no voting rights and offer a fixed rate of return to the holder.The shares are redeemed as expected with a fresh issue of shares.What are the accounting entries and note disclosures to record the transactions on 1 July 2012and 30 June 2016?


A)
Motion Ltd issued $5 million in redeemable preference shares in a private placement on 1 July 2012.The shares are redeemable on 30 June 2016,have no voting rights and offer a fixed rate of return to the holder.The shares are redeemed as expected with a fresh issue of shares.What are the accounting entries and note disclosures to record the transactions on 1 July 2012and 30 June 2016? A) Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position. B) Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position. C) Note disclosure: redeemable preference shares have the characteristics of debt and so have been classified as liabilities in the statement of financial position. D) Note disclosure: redeemable preference shares are to be redeemed on 30 June 2008. Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position.
B)
Motion Ltd issued $5 million in redeemable preference shares in a private placement on 1 July 2012.The shares are redeemable on 30 June 2016,have no voting rights and offer a fixed rate of return to the holder.The shares are redeemed as expected with a fresh issue of shares.What are the accounting entries and note disclosures to record the transactions on 1 July 2012and 30 June 2016? A) Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position. B) Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position. C) Note disclosure: redeemable preference shares have the characteristics of debt and so have been classified as liabilities in the statement of financial position. D) Note disclosure: redeemable preference shares are to be redeemed on 30 June 2008. Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position.
C)
Motion Ltd issued $5 million in redeemable preference shares in a private placement on 1 July 2012.The shares are redeemable on 30 June 2016,have no voting rights and offer a fixed rate of return to the holder.The shares are redeemed as expected with a fresh issue of shares.What are the accounting entries and note disclosures to record the transactions on 1 July 2012and 30 June 2016? A) Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position. B) Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position. C) Note disclosure: redeemable preference shares have the characteristics of debt and so have been classified as liabilities in the statement of financial position. D) Note disclosure: redeemable preference shares are to be redeemed on 30 June 2008. Note disclosure: redeemable preference shares have the characteristics of debt and so have been classified as liabilities in the statement of financial position.
D)
Motion Ltd issued $5 million in redeemable preference shares in a private placement on 1 July 2012.The shares are redeemable on 30 June 2016,have no voting rights and offer a fixed rate of return to the holder.The shares are redeemed as expected with a fresh issue of shares.What are the accounting entries and note disclosures to record the transactions on 1 July 2012and 30 June 2016? A) Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position. B) Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position. C) Note disclosure: redeemable preference shares have the characteristics of debt and so have been classified as liabilities in the statement of financial position. D) Note disclosure: redeemable preference shares are to be redeemed on 30 June 2008. Note disclosure: redeemable preference shares are to be redeemed on 30 June 2008.

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