Rand Limited is a resident of the Republic of South Africa and has a 30 June...
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Rand Limited is a resident of the Republic of South Africa and has a 30 June financial year end. Since government bonds are considered to be low-risk investments, Rand Limited purchased government bonds on 1 December 2022 for R237 890. Rand Limited earns interest at a coupon rate of 6.9% per annum, payable six-monthly on the nominal value of R270 000. These government bonds mature on 31 May 2024 at the nominal value of R270 000. REQUIRED: 4.1. Calculate the yield-to-maturity applicable to the government bond transaction. Clearly show all your financial calculator inputs. 4.2. 4.3. (7 marks) Calculate the total interest accruing to Rand Limited during the 2023 and 2024 years of assessment by applying the yield to maturity method prescribed in section 24J. (17 marks) Compare the total section 24J interest calculated in question 4.2. with the total interest deemed to be accrued according to cash flows. (7 marks) Rand Limited is a resident of the Republic of South Africa and has a 30 June financial year end. Since government bonds are considered to be low-risk investments, Rand Limited purchased government bonds on 1 December 2022 for R237 890. Rand Limited earns interest at a coupon rate of 6.9% per annum, payable six-monthly on the nominal value of R270 000. These government bonds mature on 31 May 2024 at the nominal value of R270 000. REQUIRED: 4.1. Calculate the yield-to-maturity applicable to the government bond transaction. Clearly show all your financial calculator inputs. 4.2. 4.3. (7 marks) Calculate the total interest accruing to Rand Limited during the 2023 and 2024 years of assessment by applying the yield to maturity method prescribed in section 24J. (17 marks) Compare the total section 24J interest calculated in question 4.2. with the total interest deemed to be accrued according to cash flows. (7 marks)
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Related Book For
Advanced Accounting
ISBN: 978-0538480284
11th edition
Authors: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Posted Date:
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