QUESTION ONE [20] Classic (Pty) Limited signed a contract with Design Time Renovators (the customer) on the 1 June 2020. The terms of the contract included the following: Classic (Pty) Lid would supply and install a Victorian grand tub on the 1 July 2020 after which it would be required to supply and install an extractor fan in the bathroom The customer promised consideration of R25 000 payable by the 30th of September at the latest after both the bathtub and extractor fan are installed. The contract is cancellable in the event of non-performance The stand -alone selling prices for the supplied and fitted products are as follows : Bathtub R20 000 Extractor R5 000 Classic (Pty ) Ltd supply and install the bathtub on the 1" of July as agreed and the extractor on the 5 of August. Control over the bathtub and extractor passes to Design Time Renovators on this day. Amount owing by Design Time Renovators is paid over on the 25 September 2020 Required 1. Prepare the journal entries for the year ended 31* December 2020 in respect of the above transactions in the books of Classic (Pty) Ltd. (12) 2. What five criteria must be met to ensure a contract exists ? (5) 3. What is a wholly unperformed contract ? (3 ) QUESTION TWO [45] Blender & Grinder Limited issued, 500 000 20% debentures on the 2 January 2017, at the face value of R10 each (which represented the fair value on issue date) The 20% debenture interest is payable on the 31" December each year and the debentures are compulsory convertible into ordinary shares on the 31" December 2019 at 1 ordinary share for every 5 debentures held An appropriate adjusted market dividend rate for pure redeemable debentures is 25%. The debentures are not held for trading Required Prepare a memorandum to the directors of Blender & Grinder Limited outlining 1. The journal entries required to record the financial instrument over its 3-year life in terms of IFRS 9 Financial Instruments (35)