The following depicts the Balance of Payments for Nicaragua for the year 2020.

Account	Credit (+)	Debit (-)	Net
Merchandise Account	1000 2000	400	2600
Services Account		500	-500
Income Account		600	-600
Unilateral Transfers Account		2000	-2000 Net=-500
Current Account	400 700		1100
Official Assets Account		700	-700
Private Assets Account	500	1000	-500
Financial and Capital Account	600		600 Net=500

It is discovered two transactions have not been included in the balance of payments. These are:

1). It was also discovered that "Print shop" a firm in Nicaragua imported T-shirts worth 400 from the USA. This was paid using a bank balance "Print shop" had in a bank in the USA.

2). Also, the Nicaragua government purchased 700 of USA government bonds paying for it with bank balances held by the Nicaragua government in a bank in the USA.

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Required:

a): Record transactions (1) and (2) in the balance of payments. Make sure to show both the credit and debit entries in the correct accounts [2 marks]

b): Compute (i) the goods and services balance, and (ii) the current account balance [2 marks]

GOODS & SERVICES BALANCE