Following is the statement of financial position of Kmart Bhd as at 30 March 2019

Statement of Financial Position of Kmart Bhd as at 30 March 2019

Issued share capital

340,000,000 Ordinary shares of RM 2 each 680,000,000

Retained earnings 415,000,000

Non-current liability

50,000,000 Redeemable Preference Shares, 5% 125,000,000

Debentures, 4% 20,000,000

___________

Total Equity & Liability 1,240,000,000

Non-current assets 825,000,000

Cash at bank 200,000,000

Trade debtors 205,000,000

Other current assets (except cash at bank) 10,000,000

___________

Total Assets 1,240,000,000

Additional Information:

1. On 1 April 2018, Kmart Bhd issued 4 percent debentures of nominal value RM 20,000,000 at a discount of 10 percent. The debentures will be redeemed at par value. The effective interest rate is 8 percent and interest date is 30 March 2019.

2. Kmart had issued 50,000,000 Redeemable Preference Shares 5 percent which were redeemable at a premium of 20 percent on 30 March 2019. The company had amortized the premium payable over the issue period. Kmart Bhd has issued 10 million ordinary shares at RM5 per share to facilitate the redemption, and the balance through profits available for dividends.

3. On 30March 2019, Kmart decided to buy-back 2,000,000 of its ordinary shares in the open market for RM3.50 each.

Required:

1. Prepare the journal entries to record the above transactions. (20 marks)

2. Prepare the statement of Financial Position at 30 March 2019. (10 marks)