Accounting

FINANCIAL ACCOUNTING 311 DEPARTMENT OF
IFRS 9: Financial Instruments
ACCOUNTING
Solution to tutor question two
S Aboo Baker Ebrahim UP
QUESTION 2 – SUGGESTED SOLUTION
Dr Cr
R R
1 March 2017
Financial asset – At amortised cost 1 528 561
Bank [R1 516 561 + R12 000] 1 528 561
28 February 2018
Bank [R1 500 000 x 12%] 180 000
Interest received [R1 528 561 x 12,6703%a] 193 673
Financial asset – At amortised cost (balancing) 13 673
28 February 2019
Bank [R1 500 000 x 12%] 180 000
Interest received [R1 542 234b x 12,6703%a] 195 406
Financial asset – At amortised cost (balancing) 15 406
28 February 2020
Bank [R1 500 000 x 12%] 180 000
Interest received [R1 557 640c x 12,6703%a] 197 360
Financial asset – At amortised cost (balancing) 17 360
Bank 1 575 000
Financial asset – At amortised cost 1 575 000
a PV = 1 528 561 b R1 528 561 + R13 673 = R1 542 234
FV = - 1 575 000 (1 500 000 x 1,05)
pmt = - 180 000 (R1 500 000 x 12%) c R1 542 234 + R15 406 = R1 557 640
n=3
i = 12,6703% d R1 557 640 + R17 360 = R1 575 000

GENERAL LEDGER (FOR COMPLETENESS)

Financial asset – At amortised cost
01/03/2017 Bank 1 528 561 28/02/2018 Balance 1 542 234
c/f
28/02/2018 Interest received 13 673
1 542 234 1 542 234
01/03/2018 Balance b/f 1 542 234 28/02/2019 Balance 1 557 640
c/f
28/02/2019 Interest received 15 406
1 557 640 1 557 640
01/03/2019 Balance b/f 1 557 640 28/02/2020 Bank 1 575 000
28/02/2020 Interest received 17 360
1 575 000 1 575 000

FINANCIAL INSTRUMENTS 2020_TUTOR QUESTION 2 SOLUTION