Viggy Ltd is a small business with August year end. During the interim board meeting directors announced that they want to diversify the company to ensure sustainability and growth and require additional funding to sponsor the diversification project. it was then agreed that the company will issue 600 000 10% preference at the issue price of R15 compulsorily redeemable for 100 engaged in the ordinary shares for every 100 000 preference shares held.

The preference shares were issued on 31 August 2020 and are redeemable on 31 december 2025. The market interest rate for similar shares is 12% pa.Viggy Ltd holds preference shares within the business model whose objective is to collect contractual cashflows of principal and payment.Assume 18.92% as effective interest rate.

Required

Prepare the journal entries all the necessary journal entries for the year ended 31 August 2021 and 2022.

Round of to the nearest rand