A debt instrument was purchased on 1 January 2021 at its fair value. It has a...
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A debt instrument was purchased on 1 January 2021 at its fair value. It has a face value (redemption value in 5 years' time) of £550,000. It pays interest in arrears for the next 5 years at 6% per year. The effective discount rate is 8% per year. Entity 5 intends to collect the debt interest and principal as the primary objective. Show how the debt instrument in (i) should be accounted for in Entity 5's financial statements. Step by Step workings please A debt instrument was purchased on 1 January 2021 at its fair value. It has a face value (redemption value in 5 years' time) of £550,000. It pays interest in arrears for the next 5 years at 6% per year. The effective discount rate is 8% per year. Entity 5 intends to collect the debt interest and principal as the primary objective. Show how the debt instrument in (i) should be accounted for in Entity 5's financial statements. Step by Step workings please
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Entity 5 acquired a debt instrument with a face val... View the full answer
Related Book For
Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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