The Financial Manager of INVEST Ltd would toe your the transactions
1 On 1 July 2018 INVEST Ltd purchased 100 000 N$10 debentures for N$1 000 000 from FOCUS Ltd These debentures will be redeemed at four years time at a Premium of 50% The coupon-rate quoted on the debentures is 12%, payable at 30 June each year The market interest rate is 21 19051%. On 30 June 2020 FOCUS Ltd announced that it was experiencing cash flow problems and would not be able to pay interest in the next year but has committed to paying N$336 000 on 30 June 2022 in full and final payment. INVEST Ltd acquired the debentures under a business model whose objective is to hold assets in order to collect contractual cash flows and it did not designate the above debentures as at fair value through profit or loss. 2. INVEST Ltd acquired 200 8% VISION bonds (par-value of R10 000) for 582 000 000 on 1 January 2019. INVEST Ltd sold 80 of these 8./. VISION bonds to MISSION Ltd on 1 April 2020 for 101%. Interest on the bonds are payable in arrears annually on 31 December. The bonds traded at 101.8% at 30 June 2020 (30 June 2019: 101.1%).
INVEST Ltd remeasures its investment in bonds to fair value before each disposal. Assume that any decreases in fa, value are temporary.
INVEST Ltd designated these bands as “at fair value through profit and loss (P/L)” on initial recognition. No transaction cost was incurred on any of the above transactions.
Required: Journalise the above transactions in the accounting records of INVEST Ltd for the reporting periods ended 30 June 2019, 2020 and 2021. (20 marks)
Journal narrations are not required Show all workings clearly
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