Invest4U (Pty) Ltd is a company with a December financial year-end. To raise capital for an expansion project the company's board of directors approved the issue of debentures to the public. On 1 July 2023, Invest4U (Pty) Ltd issued 150 10% debentures with a principal value of R5 000 each. Transaction costs amounting to R1 800 were incurred with the issue of the debentures. The transaction cost was paid for in cash. The interest on the debentures is payable bi-annually in arrears, starting 31 December 2023. The debentures are redeemable on 30 June 2028 at a premium of R20 each. REQUIRED: Prepare extracts from the statement of profit or loss and other comprehensive income for the year ended 31 December 2024 and the statement of financial position as at 31 December 2024 for Invest4U (Pty) Ltd showing all the balances relating to the debentures.

Invest4U (Pty) Ltd is a company with a December financial year-end. To raise capital for an expansion project the company's board of directors approved the issue of debentures to the public. On 1 July 2023, Invest4U (Pty) Ltd issued 150 10% debentures with a principal value of R5 000 each. Transaction costs amounting to R1 800 were incurred with the issue of the debentures. The transaction cost was paid for in cash. The interest on the debentures is payable bi-annually in arrears, starting 31 December 2023. The debentures are redeemable on 30 June 2028 at a premium of R20 each. REQUIRED: Prepare extracts from the statement of profit or loss and other comprehensive income for the year ended 31 December 2024 and the statement of financial position as at 31 December 2024 for Invest4U (Pty) Ltd showing all the balances relating to the debentures.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Invest4U (Pty) Ltd is a company with a December financial year-end.
To raise capital for an expansion project the company's board of directors approved
the issue of debentures to the public.
On 1 July 2023, Invest4U (Pty) Ltd issued 150 10% debentures with a principal value
of R5 000 each. Transaction costs amounting to R1 800 were incurred with the issue
of the debentures. The transaction cost was paid for in cash.
The interest on the debentures is payable bi-annually in arrears, starting 31 December
2023.
The debentures are redeemable on 30 June 2028 at a premium of R20 each.
REQUIRED:
Prepare extracts from the statement of profit or loss and other comprehensive income
for the year ended 31 December 2024 and the statement of financial position as at
31 December 2024 for Invest4U (Pty) Ltd showing all the balances relating to the
debentures.

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