Page 130 - Accountancy_F5

Solution 4.9

(i) Recording transactions related to 10% corporate bonds
In the books of Patapata Ltd 10% Corporate bonds account.
Dr Cr
Interest payable 30 Jun. & 31 Dec.
st
th
Nominal Income Capital Nominal Income Capital
FOR ONLINE READING ONLY
Particulars
TZS TZS TZS Particulars TZS TZS TZS
“000” “000” “000” “000” “000” “000”
1 Jan.2020 1 May
st
st
Bal b/d 10,000 - 8,500 sales-Bank 10,000 333.33
LANGUAGE EDITING 9,000
31 Dec. 2020
st
LANGUAGE EDITING
Investment
income- P/L - 333.33 -
31 Dec. 2020
st
Profit on sale
of inv. - - 500
10,000 333.3 9,000 10,000 333.3 9,000

Workings:
1. Selling price = 90% x10,000,000 = TZS 9,000,000
2. Interest (1 January -30 April, 2020) =
th
st
4 # 10 % # 10 ,000 000 = TZS 333,333
,
12
3. Purchase cost (capital) TZS 8,500,000

(ii) Recording transactions related to 12% government bonds
In the books of Patapata Ltd
12% government bonds account Interest payable 30 Jun. & 31 Dec.
st
th
Dr Cr
Nominal Income Capital Nominal Income Capital
Particulars TZS TZS TZS Particulars TZS TZS TZS
“000” “000” “000” “000” “000” “000”
30 Jun.
th
1 Jan.2020 2020
st
Bal b/d 15,000 - 13,500 Interest 900
(bank)

Student’s Book Form Five
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