QUESTION $2(20$ Marks$)$

Ntabazinduna $($Pty$)$ Ltd was incorporated during $2022$:

Preliminary costs $($legal costs incurred in connection with the start$-$up of the company$)$ of R$5000$ were paid

on $2$ January $2022.$

$2000$ ordinary no par value shares were issued at R$10$ each on $5$ January $2022.$

Share issue costs of R$2000$ were paid on $5$ January $2022.$

On $15$ January $2022,400$ of these shares were converted into $12\%$ preference share equity.

The draft statement of comprehensive income for $2022,$ before processing any adjustments for the above

transactions, reflected total comprehensive income for $2022$ of R$125000($components of other

comprehensive income: R $0).$

REQUIRED:

$2\mathrm{.}1$ Process journals to account for the preliminary costs, share issue and the related share issue costs. $(10$ Marks$)$

$2\mathrm{.}2$ Disclose this in the statement of changes in equity for the year ended $31$ December $2022.(10$ Marks$)$