Question: On 1 October year 1, RPS plc issued one million 1 5% redeemable preference shares. The shares were issued at a discount of 50,000 and

On 1 October year 1, RPS plc issued one million £1 5% redeemable preference shares. The shares were issued at a discount of £50,000 and are due to be redeemed on 30 September Year 5. Dividends are paid on 30 September each year.

Required:
Show the accounting treatment of the preference shares throughout the life-span of the instrument calculating the finance cost to be charged to profit or loss in each period.

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