Required
a) Citing relevant accounting standards discuss and explain how the interest expense during construction would have been accounted for in the financial statement.
b) Compute the interest that you think has been expensed by the accountants relating to the construction for the years 2017 and 2018.
c) Basing on the explanation in (a) above ,prepare all the necessary Journal entries to correct and update the books relating to the cost of this asset.
d) Prepare the new Income statement and the statement of financial position for 2017, 2018 and 2019 after recording the adjustments in (c) above.
e) Explain why it’s important for accountants to be up to date with the financial accounting standard by, discussing the effect that the above adjustment on the finance costs have on the profit before tax for in 2017, 2018, 2019 and its impact on the shareholders and potential investors
f) After noticing the above anomaly relating to how the finance cost was recorded, you suspect that may be the issue of the bond on January 1 2017 had some anomaly also, but after checking you discover that it was properly recorded. Prepare all the journal entries that were made by the accountants relating to this bond issue for the year 2017, 2018 and 2019 that have made you to conclude that the bond issue was properly recorded. 

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QUESTION TWO Domiciled in Zambia and listed on the Lusaka Securities Exchange, Real Estate Investments Zambia Plc (REIZ) (formerly Farmers House Plc) is primarily involved in investment, development and restructuring of commercial and non-commercial property for letting. Its defined expansion strategy, implemented successfully since 2000, and has grown an impressive property portfolio which is a strong basis upon which it has continued its growth. REIZ strategy is now evolving to include residential and commercial property in their portfolio in future. Below is the five year financial summary for REIZ. Page 5 of 8 QUESTION TWO Domiciled in Zambia and listed on the Lusaka Securities Exchange, Real Estate Investments Zambia Plc (REIZ) (formerly Farmers House Plc) is primarily involved in investment, development and restructuring of commercial and non-commercial property for letting. Its defined expansion strategy, implemented successfully since 2000, and has grown an impressive property portfolio which is a strong basis upon which it has continued its growth. REIZ strategy is now evolving to include residential and commercial property in their portfolio in future. Below is the five year financial summary for REIZ. Page 5 of 8

Answer rating: 100% (QA)

a According to IAS 23 Borrowing Costs borrowing costs are recognized as an expense in the period in which they are incurred Borrowing costs include in... View the full answer