Sunshine Power Ltd is a company that sells and installs solar panels, inverters, and

inverter batteries in Johannesburg, South Africa. Mr$.$ Wind is the founder and CEO of

Sunshine Power Ltd$.$

Below is an extract from the pre$-$adjustment trial balance of Sunshine Power Ltd for

the financial year ended $30$ September $2024$:

Sunshine Power Ltd

Pre$-$Adjustment Trial Balance at $30$ September $2024$

Account Debit Credit

Share Capital $(1,000,000$ R$1$ shares$)1,000,000$ Cr

Retained Earnings at $1$ October $2023450,000$ Cr

Long$-$term loan $($at $1$ October $2023)1,500,000$ Cr

Trade Payables $25,000$ Cr

Trade Receivables $17,250$ Dr

Inventory $33,780$ Dr

Bank $26,170$ Dr

Salaries and Wages $33,600$ Dr

Telephone expense $?$ Dr

Prepaid Telephone expense $150,000$ Dr

Sales Revenue $360,000$ Cr

Cost of Sales $60,140$ Dr

Transport costs $4,560$ Dr

Marketing costs $4,820$ Dr

Interest expense $?$ Dr

Rent expense $?$ Dr

Interest income $30,000$ Cr

Investment in Government Bond $1,000,000$ Dr

Machinery $($Carrying Amount$)2,000,000$ Dr

Depreciation Expense $59,970$ Dr

Prepaid Rent Expense $($at $1$ October $2023)30,780$ Dr

Accrued Interest Expense $($at $1$ October $2023)56,250$ Cr

The following information was not taken into consideration in the preparation of the

above trial balance:

$1.$ Sunshine Power Ltd has rented a small office space in Sunninghill,

Johannesburg, since $1$ January $2022.$ At the beginning of the lease, the rental

cost of Sunshine Power Ltd was R $10,000$ per month. The lease agreement

stipulates an increase of $8\%$ in the monthly rental per annum. Per the

agreement with the landlord, should Sunshine Power Ltd pay their rental upfront

for the entire year on $1$ January each year, they get a $5\%$ discount on rental

premiums. Sunshine Power Ltd elected to take this option in order to obtain the

discount every year since the inception of the lease. No entry has been made

in this regard.

$2.$ A long$-$term loan of R$2,100,000$ was taken out on $1$ December $2020.$ The terms

of the loan state that the initial amount is repayable over $7$ years, in equal

annual instalments, starting on $1$ December $2021.$ Interest at $15\%$ per annum

is payable in arrears on $30$ June and $31$ December. No entry has been made

in this regard.

$3.$ During the Black Friday specials of October $2023,$ Mr$.$ Wind obtained cell$-$phone

contracts for key members of his management team. This required him to make

an upfront payment of R$150,000$ to VodaC, in respect of the period $1$ November

$2023$ to $31$ October $2025.$ The accountant has recognised a prepayment of the

full R $150,000$ but does not know what should be expensed in the current year.

$4.$ Included in the inventory count at $30$ September $2024$ were $5$ solar panels that

were damaged. These panels initially cost Sunshine Power Ltd R $3,500$ each.

In their damaged form, they can be sold for R $980$ each. No entry has been

made in this regard.

$5.$ Sunshine Power Ltd owes its employees$$ salaries to the value of R$7,400$ at $30$

September $2024.$ No entry has been made in this regard.

REQUIRED:

Prepare the general journal entries required to record each of the transactions in items

$1$ to $5$ above, for the year ended $30$ September $2024.$ Show all your workings and

round all workings off to the nearest R$1.(57$ marks$)$

$$ Additional information $1(16$ marks$)$

$$ Additional information $2(24$ marks$)$

$$ Additional information $3(8$ marks$)$

$$ Additional information $4(6$ marks$)$

$$ Additional information $5(3$ marks$)$