QUESTION THREE (20 MARKS) On 15 June 2012. A Limited, invests in a bond at...
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QUESTION THREE (20 MARKS) On 15 June 2012. A Limited, invests in a bond at cost price R980 000 + R4 110 = R984 110. The R4 110 is an advance receipt for interest, which was deducted from the selling price. The buyer will not receive the cash for this interest earned. The seller will receive it, but the buyer will earn the interest, resulting in the recognition of the interest earned at 30 June 2012. Provide for Journal entries, for the Investment in a bond by A Limited as at 15 June 2012 and when interest is earned on 30 June 2012.
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