Question: A company issues 0% loan notes at their nominal value of $40,000,000. The loan notes are repayable at a premium of $11,800,000 after three years.

A company issues 0% loan notes at their nominal value of $40,000,000. The loan notes are

repayable at a premium of $11,800,000 after three years. The effective rate of interest is 9%.

Required:

What amounts will be shown in the statement of profit or loss and statement of financial position

for years one to three?

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