Part A The accounting treatment for a provision and a contingent liability is the same.' Discuss. (4 marks) Part B Two-Space Ltd have recently purchased new premises in order to expand their inventory space. The cost of the premises was $1 680 000 and on 1 October they financed the purchase with a 8% loan to Canary Bank to be paid off over five years. Two-Space paid a cash deposit of $450 000 and the agreement of the loan stipulates repayments will be $30 415 monthly. The first payment is due on 1 December. Assume interest is calculated monthly. Required 1. II. Prepare a general journal entry for Two-Space Ltd to record the payment due on 1 December. (2 marks) Calculate the outstanding principal after the first payment is made on 1 December. (2 marks) Part C During the year of 2018, CoolAir Ltd sold 10 000 refrigerators for $800 cash, each. The refrigerators carry a 3-year warranty. Past experience indicates that 3.5% of sales will be returned during the year for repairs. The average cost of repairs under warranty is $300. During the year, 375 of the refrigerators that were sold were repaired at the average price per unit. Required: L II. III. Prepare the journal entry to record the provision for warranty for the year 2020. (2 marks) Prepare the journal entry to record the repairs made under warranty for 2020. (2 marks) If the Provision for Warranty account had debit balance of $50,000 in year end of 2019, what is the account balance at year end of 2020? Do you think the provision is adequate? (3 marks)