Question 1 Shapumba Ltd is a company that operates 3 different leisure lodges in the north and north-eastern part of Nam

[answerhappygod]

Question 1 Shapumba Ltd is a company that operates 3 different
leisure lodges in the north and north-eastern part of Namibia. The
company’s reporting period ends on 30 June. The following relevant
accounting policies of Shapumba Ltd are presented to you: -
Vehicles are depreciated at 10% per year on cost price with no
residual value. - The company values its inventory according to the
weighted average cost method using the historical cost model. - The
company subsequently measures investment property according to the
fair value model. The company is preparing the financial statements
for the reporting period ended 30 June 2017 and has requested your
assistance and advice on the following matters. The financial
statements will be approved on 20 August 2017. Ignore VAT in all
the matters. MATTER 1 On 1 February 2015 Shapumba Ltd purchased
equipment with an invoice price of N$ 645 800 by entering into a
loan agreement with the Development Bank. The equipment is pledged
as security for the loan. The loan instilments will consist of
equal monthly instilments over a period of 4 years and a final
residual payment of N$ 55 000. The interest rate applicable on this
lease agreement is 10% per year, compounded monthly. All payments
due have been paid on time each month. The equipment is depreciated
on the straight line basis over 8 years with no residual value.
Required: Disclose the long term borrowings note applicable to the
lease liability in the Statement of Financial Position of Shapumba
Ltd on 30 June 2017 in accordance with International Financial
Reporting Standards. (20 MARKS) Note: Round disclosed amounts to
the nearest Dollar.