The 6% Rs 20,000 debentures were issued on 1st July 2015 at a discount of 10%. Issue costs amounted to Rs 1,000. The debentures will be redeemed at a premium of Rs 1015 above par value. Interest payments (equivalent to 6% of Rs 20000) are effected every 30 June. The effective rate of interest is 12% per annum. The discount of Rs 2000 on issue together with the issue costs have been included in administrative expenses. 

Required: 

(i) State the carrying amount of the debentures in the balance sheet at 30 June 2016 and explain.

(ii) Using the provisions of IFRS 9, state the revised carrying amount of the 6% Debentures at 30 June 2016.

Answer rating: 100% (QA)

ii Carrying amount of debentures in the balance sheet at 30 June 2016 is 20000 iii As per the ... View the full answer