Question: Can someone solve part c for me please Question 4 On 31 December 20XO, Mariwa plc purchased corporate bonds for a price of 125,000. The

 Can someone solve part c for me please Question 4 On

Can someone solve part c for me please

Question 4 On 31 December 20XO, Mariwa plc purchased corporate bonds for a price of 125,000. The bonds mature on 31 December 20X5. According to the terms of the bonds, Mariwa expects to receive the following cash flows: - Five annual coupons of 6,000 at the end of each year, starting from 31 December 20X1; - Principal amount of 120,000 on 31 December 20X5. The effective interest rate on Mariwa's bonds is 4.06%. Required a) Define the terms financial instrument and financial asset according to IFRS and explain whether such definitions apply to Mariwa's bonds. 8 marks b) Explain what circumstances would allow (or require) Mariwa to classify its bonds under each of the following accounting categories: O Amortised cost 5 marks O Fair value through P&L 5 marks c) Compute the carrying amount of the bonds on Mariwa's statement of financial position at 31 December 20X1 and at 31 December 20X2 using the amortised cost method. Show all your workings. 7 marks Question 4 On 31 December 20XO, Mariwa plc purchased corporate bonds for a price of 125,000. The bonds mature on 31 December 20X5. According to the terms of the bonds, Mariwa expects to receive the following cash flows: - Five annual coupons of 6,000 at the end of each year, starting from 31 December 20X1; - Principal amount of 120,000 on 31 December 20X5. The effective interest rate on Mariwa's bonds is 4.06%. Required a) Define the terms financial instrument and financial asset according to IFRS and explain whether such definitions apply to Mariwa's bonds. 8 marks b) Explain what circumstances would allow (or require) Mariwa to classify its bonds under each of the following accounting categories: O Amortised cost 5 marks O Fair value through P&L 5 marks c) Compute the carrying amount of the bonds on Mariwa's statement of financial position at 31 December 20X1 and at 31 December 20X2 using the amortised cost method. Show all your workings. 7 marks

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