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Mountain Spring Distributors Limited (MSDL) is a distributor of plastic household products, located in Grange...

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Accounting

Mountain Spring Distributors Limited (MSDL) is a distributor of plastic household products, located in Grange Hill, Westmoreland. The company was incorporated on the 1st of January 2019 with a share capital of 6,000,000 ordinary shares of $2. On the date of the incorporation the company acquired two (2) delivery trucks at a cost of $8,000,000 each and decided to depreciate the trucks using the units of output method. The company planned to keep the trucks for a useful life of 200,000 miles each. The residual value of each truck is estimated to be $1,000,000 each after 300,000 miles. On January 1, 2020 MSDL issued 7% convertible bonds at their nominal value of $48,000,000. The bonds are convertible at any time up to maturity into 50 ordinary shares for each $600 of bond. Alternatively, the bonds will be redeemed at par after 4 years. Similar non-convertible bonds carry an interest rate of 10%. On January 1 2021, the company issued 2,000,000 ordinary shares at a price of $3.50 which was fully subscribed. This w

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