CARMEN LIMITED
Calculations
| Date of cash flow | CU |
| 01/07/2013 (500,000 x 105%) | 525,000 |
| 01/01/2014 (500,000 x 18% x 6/12) | (45,000) |
| 01/07/2014 | (45,000) |
| 01/01/2015 | (45,000) |
| 01/07/2015 | (45,000) |
| 01/07/2015 (500,000 x 95%) | (475,000) |
Calculation of the fair value on initial recognition of the liability
| FV | 475,000 | CU500,000 x 95% |
| PMT | 45,000 | CU500,000 x 18% x 6/12 |
| N | 4 | 2 x 2 |
| I/YR | 6,40750 | 12,81497 ÷ 2 |
| PV thus | CU525,000 |
1. General journal of Carmen Limited
|
|
DR CU |
CR CU |
|
| 2013 | |||
| 01/07 | Bank (SFP) | 525,000,00 | |
| Debenture liability (SFP) | 525,000,00 | ||
| 2014 | |||
| 01/01 | Finance cost (P or L) | 33,639,30 | |
| Debenture liability (SFP) | 33,639,30 | ||
| CU525,000,00 x 12,81497% x 6/12 | |||
| 01/01 | Debenture liability (SFP) | 45,000,00 | |
| Bank (SFP) | 45,000,00 | ||
| Balance on Debenture liability account: CU525,000,00 + CU33,639,30 – CU45,000,00 = CU513,639,30 | |||
| 30/06 | Finance cost (P or L) | 32,911,36 | |
| Debenture liability (SFP) | 32,911,36 | ||
| CU513,639,30 x 12,81497% x 6/12 | |||
| 30/06 | Debenture liability (SFP) | 45,000,00 | |
| Other payables (SFP) | 45,000,00 | ||
| Balance on Debenture liability account: CU513,639,30 + CU32,911,36 – CU45,000,00 = CU501,550,66 | |||
| 01/07 | Other payables (SFP) | 45,000,00 | |
| Bank (SFP) | 45,000,00 | ||
| 2015 | |||
| 01/01 | Finance cost (P or L) | 32,136,78 | |
| Debenture liability (SFP) | 32,136,78 | ||
| CU501,550,66 x 12,81497% x 6/12 | |||
| 01/01 | Debenture liability (SFP) | 45,000,00 | |
| Bank (SFP) | 45,000,00 | ||
| Balance on Debenture liability account: CU501,550,66 + CU32,136,78 – CU45,000,00 = CU488,687,44 | |||
| 30/06 | Finance cost (P or L) | 31,312,57 | |
| Debenture liability (SFP) | 31,312,57 | ||
| CU488,687,44 x 12,81497% x 6/12 | |||
| 30/06 | Debenture liability (SFP) | 45,000,00 | |
| Other payables (SFP) | 45,000,00 | ||
| Balance on Debenture liability account: CU488,687,44 + CU31,312,57 – CU45,000,00 = CU475,000,00 (rounded) | |||
| 01/07 | Other payables (SFP) | 45,000,00 | |
| Bank (SFP) | 45,000,00 | ||
| Debenture liability (SFP) | 475,000,00 | ||
| Bank (SFP) | 475,000,00 | ||
| Balance on Debenture liability account: R475 000,00 – R475 000,00 = R0 |
2. General ledger of Carmen Limited
