QEUESTION 3 Rapid Itd has a year end of 30 September and has a functional currency...

 

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QEUESTION 3 Rapid Itd has a year end of 30 September and has a functional currency of Rand. On 1 October 2015, Rapid Itd took out a loan from foreign bank in the UK for £250 000. Interest is payable annually in arrears on 30 September each year at a rate of 10% per annum. The loan is repayable in full settlement on 30 September 2017. The following exchange rates are applicable: Date 3 1 October 2015 30 September 2016 30 September 2017 Average rate 2016 Average rate 2017 Initial recognition Forex difference 2016 Translation date 30/09/2016 Forex difference 2017 Translation date 30/092017 E 250 000 3.1 complete the table below for the exchange differences repayable on the loan. Write the letter of the alphabet with the corresponding amount. State whether amounts are gains or losses where applicable: 250 000 R/E exchange rate 250 00 a R15-30 d R15.50 9 R15.45 Exchange rate R15.00 R14.89 R b C e f h 3-2 Complete the table below for the exchange differences on the interest payments. Write the letter of the alphabet with the corresponding amount. State whether amounts are gains of losses where applicable. Interest accrual 30/09/2016 Interest payment 30/09/2016 Exchange difference 2016 Interest accrual 30/09/2017 Interest payment Exchange difference 2017 E a C 25 000 25 000 Exchange rate B d f h R 375 000 387 500 e 9 i j 3-3 Provide the journal entries to record the exchange differences on the loan and interest for the year ended 30 September 2016. QEUESTION 3 Rapid Itd has a year end of 30 September and has a functional currency of Rand. On 1 October 2015, Rapid Itd took out a loan from foreign bank in the UK for £250 000. Interest is payable annually in arrears on 30 September each year at a rate of 10% per annum. The loan is repayable in full settlement on 30 September 2017. The following exchange rates are applicable: Date 3 1 October 2015 30 September 2016 30 September 2017 Average rate 2016 Average rate 2017 Initial recognition Forex difference 2016 Translation date 30/09/2016 Forex difference 2017 Translation date 30/092017 E 250 000 3.1 complete the table below for the exchange differences repayable on the loan. Write the letter of the alphabet with the corresponding amount. State whether amounts are gains or losses where applicable: 250 000 R/E exchange rate 250 00 a R15-30 d R15.50 9 R15.45 Exchange rate R15.00 R14.89 R b C e f h 3-2 Complete the table below for the exchange differences on the interest payments. Write the letter of the alphabet with the corresponding amount. State whether amounts are gains of losses where applicable. Interest accrual 30/09/2016 Interest payment 30/09/2016 Exchange difference 2016 Interest accrual 30/09/2017 Interest payment Exchange difference 2017 E a C 25 000 25 000 Exchange rate B d f h R 375 000 387 500 e 9 i j 3-3 Provide the journal entries to record the exchange differences on the loan and interest for the year ended 30 September 2016.

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Table 31 Alphabet a b C d e f 9 h Table 32 Alphabet a b d e f g h i Coresponding amount Explaination ... View the full answer