On 1 January 2 0 2 2 solutions Ltd purchased 5 0 0 0 debentures in
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Question:
On January solutions Ltd purchased debentures in kappa Ltd at a discount of on the face value of R per debenture. The marketrelated interest rate
on similar debentures was A coupon rate of per annum is payable
in arrears on June and December. The debentures will be repaid on December at face value. Transaction costs paid by solutions Ltd amounted to
R The investment in debentures is held within the business model with the objective to collect contractual cash flows of interest and principal.
On January solutions Ltd assessed the probability that kappa Ltd might fault
on payments and estimated the month expected credit losses on the debentures
to be R At the financial year end, December there was no change in
the estimation of the month expected credit losses
Required
Prepare all the journal entries required in the records of solutions Ltd for the year ended December
Related Book For
Intermediate Accounting
ISBN: 978-0077400163
6th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
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