The Board of Directors of Lindersberg Ltd authorised the company to issue a five-year loan at 5 per cent interest rate, with the interest being paid at the end of each year. A client, Global Ltd lends Lindersberg Ltd €150,000, which includes a commission of €10,000 that was paid on day one for the loan. Hence, Lindersberg Ltd receives only €140,000 in cash, with the commission of €10,000 representing a discount. Furthermore, the effective interest rate includes the commission value and has an effective rate of 6.1 percent. Thus the discount of €10,000 is amortised in Lindersberg Ltd’s books over the period of the loan, using the effective interest rate of 6.1 per cent. You are required to:

a. Show the computations for the amortisation of the discount;

b. Provide all the accounting entries for the five-year loan period in Global Ltd’s books.