a) Deft would like to understand the difference in the accounting for the bond if measured at: (i) Amortised cost (ii) Fair value through other comprehensive income (iii) Fair value through profit or loss In each case, show the journal entries at the date of purchase and for the year ending 31 March 2022 and calculate the carrying amount to present in the Statement of financial position as at that date. b) Deft has never purchased bonds before, and the directors would like an explanation as to whether selection from the three classifications above is at their discretion.

Deft purchases a bond with a nominal value of 100,000 for 95,000 on 1 April 2021 . The transaction cost associated with the purchase was 2,000. The coupon rate is 5%, payable annually in arrears. The bond will be redeemed at a premium of 5,960 above nominal value on 31 March 2024. - The effective rate of interest is 8%. - The fair value of the bond at 31 March 2022 is 110,000. - The requirement to record an expected loss adjustment (impairment) should be ignored