Question $4$

On $1$ July $2021,$ Slater Ltd issued four$-$year bonds with a total face value of $$100000$ and a coupon interest rate

of $10$ per cent per annum, payable annually in arrears.

The market interest rate for Slater's bonds was $12$ per cent and so the company had to discount the issue price to

its fair value.

Required:

Calculate the fair value of the bonds.

Prepare a schedule of amortised cost using effective interest rate method for the life of the bonds.

Prepare the journal entries for the initial and subsequent measurement of the bonds for Slater Ltd for the year

ended $30$ June $2022.$