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Financial Instruments Problem #1 On December 31, 2008, Manchester Company issued 5% preferred...

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Accounting

Financial Instruments Problem #1

On December 31, 2008, Manchester Company issued 5% preferred shares for $100,000 that are redeemable at par value if the Central Bank interest rate rises beyond a certain benchmark. On December 31, 2010, the Central Bank interest rate reaches the benchmark.

Required: Determine the appropriate accounting by Manchester Company for the redeemable preferred shares under (a) IFRS and (b) U.S. GAAP.

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