a) Sunny plc issued 60,000 ordinary shares of 80p at par to raise capital to commence trading on 1st January 2014. In order to fund a new project, Sunny plc issued an additional 10,000 ordinary shares of 80p for 1.50 for cash in March 2013. Prepare journal entries to record the initial AND subsequent issues of shares: (8 marks) b) Asa result of the project's success, Sunny plc decided to use its distributable profits to purchase share with a nominal value of 20,000 for 50,000. Below are the balances extracted from the company's statement of financial position immediately prior to the share purchase (but after the share issues). Other net assets 36,000 Bank 105,000 Retained earnings 78,000 Prepare journal entries and the statement of financial position of Sunny plc to record the purchase of share. (16 marks) c) Describe and give examples of the 2 classes of reserves and describe one example of each. (6 marks) 3 a) MaC Ltd acquires a machine on a lease with the following details: Cost of leased asset 14,000 Lease term 4 years Annual rent payable in advance 4,000 each Residual Value foil Expected economic life of asset 5 years Inception date 1 January 2015 Financial year end 31 December Using IASB's definition of Finance Lease, explain if the machine should be treated as a finance or operating lease. (7 marks) b) Calculate the interest rate implicit in the lease. (7 marks) c) Show the journal entries of the lease effect on the Statement of Financial Position and the Statement of Comprehensive Income for the year ended 31 December 2015