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QUESTION 3 ( FINANCIAL INSTRUMENTS ) [ IAS 3 2 , IFRS 9 ] [ 3 0 marks ] On 1 January 2 0 1
QUESTION FINANCIAL INSTRUMENTSIAS IFRS marks
On January Munya Tsatsa Pty Ltd a company based in Lephalale purchased government bonds for R
The face value is R and the coupon interest is per annum payable annually in arrears.
The government bonds are redeemable at face value in years.
The effective interest rate is per annum.
The company's intention was to hold government bonds to collect contractual cash flows and the return on capital and interest.
On July the company changed its business model the new business model become effective from this date relating to the government bonds. The fair value on this date was R and changed to R on December
Credit risk has not increased significantly since recognition over the years and the asset was not credit impaired at any point.
The month expected credit losses were estimated as follows.
tableDate month expected credit loss January R December R July R December R
Required
Prepare all related journal entries in Munya Pty Ltd s general journal for the years ended December and assuming that the government bonds were reclassified from amortised cost to fair value through profit or loss.
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