Pass the INITIAL journal entries and then Prepare the extracts of financial statements for the year ending 31^st December 2016, for the following scenarios:

a. DEF has purchased an investment of 15,000 shares on 1 August 2016 at a cost of $6.5 each. Transaction costs on the purchase amounted to $1,500. As at the year-end, these shares are now worth $7.75 each. (7 marks) b. Norman issues 6% loan notes on 1st January 2016, with a nominal value of $150,000. They are issued at a 5% discount and $1,700 of issue costs is incurred. The loan notes will be repayable at a premium of 9.58% after four years. The effective interest rate is 10%