ress fimited acquired a debt instrtinent with five - year term at its market value (fair value) on I uary 205 when the market interest rate on similar debt instruments was 5,5%. The instrument a face value (principal amount) of R125 000 and carries fixed interest of 4.5% paid annualiy on 31 ernlber. maturity date of this debt instrument is 31 December 206, when it will settle at face value. The t instrument traded at 97,2% at 31 December 206. Investments in debt instruments are measured amortized cost in aceordance with cypress Limited's business mode Required pare the journal entries relating to the investment in the debt instrument in the records of press limited for the financial years which ended on 3 DDecember 200b. ow how the investment in the debt instrument should be disclosed in the financial statements the years ended 31 December 2005 and 31 December 206 fill need to record the purchase of the debt instrument at its fair value on 1 January zos. The journal entry will be: ebit: Debt instrument (Fair value) Credit: Cash n 31 December 205, you will need to record the interest income earned on the debt instrument. The journal entry will be: ebit: Cash Credit: Interest income ournal entry will bet Debit: Cash Creditt Interest income Credit: Unrealized gain on debt instrument measured at amortized cost. The carrying amount of the debt instrument should be diselosed as wenl as any unrealized gains or losses Question 3 Obama limited issted a debt instrument on 1July203, raising R5 million (the principal v a 1 u e o f the instrument). Interest (coupon) of 5%p. settled on 30 June 2013 at a prentium of 10% transaction costs amotinted to R12693 Required Calculate the effective interest rate applicable to this instrument Prepare ALL the journal entries relating to the debt instrument for the financial year ending3 December 2010 dates are required Prepare the note disclosure for the debt instrument to be included in the financial statements of obama