Aries ltd. is one of the leading business group in Sultanate of Oman. More than 5000 employees are working in this group. With its commitment and strong focus in providing engineering solutions to the Oil & Gas, Petrochemicals, Power, Water and Wastewater sectors, Aries ltd. Group has been structured into three Strategic Business Units (SBUs): Contracting, Trading & Manufacturing. With its commitment and strong focus in providing engineering solutions to the Oil & Gas, Petrochemicals, Power, Water and Wastewater sectors, Aries Group has been structured into three Strategic Business Units (SBUs): Contracting, Trading & Manufacturing.

1. Aries ltd has invested OMR 56,000 in the equity shares of Zuhaina. The other shares whose value is OMR 144,000 in Zuhaina were held by many other shareholders. In January 2019, Arib offered to buy all the shares of Zuhaina. The offer was accepted by the remaining shareholders except Aries ltd. Aries ltd wants to hold on to its shares in Zuhaina. On 1^st March 2019, Arib purchased all the shares worth OMR 144,000 of the share capital of Zuhaina except the investments held by Aries ltd .

Required:

1. What is the percentage of investments held by Aries ltd.? Which method of Accounting you will use to record the investments held by Aries ltd. in Zuhaina? Explain. (2 marks)
2. Explain how the investment in Zuhaina should be treated in the Statement of Comprehensive Income of Aries ltd for the year ended 31st March 2019 and the consolidated statement of financial position at 31^st March 2019. (4 marks)

2. On April 1, 2018, Aries. issued bonds with a par value of OMR 500,000 at 105, due in 2025. On April 1, 2021, the entire issue was called at 99 and cancelled. Interest is paid annually, and the premium is amortized using the straight-line method.

1. Calculate the profit or loss on the redemption of bonds. Explain why do you amortize premium (3 marks)

Explain the procedure followed to amortize the bonds?