Question: A company issues 5% loan notes at their nominal value of $20,000 with an effective rate of 5%. The loan notes are repayable at par

A company issues 5% loan notes at their nominal value of $20,000 with an effective rate of 5%. The loan notes are repayable at par after 4 years. What amount will be recorded as a financial liability when the loan notes are issued? What amounts will be shown in the statement of profit or loss and statement of financial position for years 14?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

A company issues 5% loan notes at their nominal value of RM20,000. The loan notes are repayable at par after 4 years. Required: What amount will be recorded as a financial liability when the loan...

Question 4: Q4: Explain how the following should be accounted for in accordance with IFRS 9 in the financial statements to 31 December Year 3. A company issues 1% loan notes with a nominal value of...

5. How does the above transaction impact the Profit or Loss statement if the company chooses the first method, which writes off the grant against the cost on the Non-Current Asset? A. Debit with...

The following trial balance relates to Orchid plc at 31 December 2022: The following notes are relevant: 1) Borrowings On 1 January 2022, Orchid issues \5 loan notes with a nominal value of \\(...

2. A company issues 0% loan notes at their nominal value of $40,000. The loan notes are repayable at a premium of $11,800 after 3 years. The effective rate of interest is 9% Required: (a) What amount...

Question 4: Q4: Explain how the following should be accounted for in accordance with IFRS 9 in the financial statements to 31 December Year 3. (i) A company issues 4% loan notes with a nominal value...

A company issues 4% loan notes with a nominal value of RM20,000. The loan notes are issued at a discount of 2.5% and RM534 of issue costs are incurred. The loan notes will be repayable at a premium...

1. Kensington Enterprise bought one hundred thousand ten year $1,000 par value bonds. The bonds pay interest of semi-annually at a rate of 6.5% per annum. The entity's aim is to hold these and...

A company issues 4 % loan notes with a nominal value of $ 2 0 , 0 0 0 . The loan notes are issued at a discount of 2 . 5 % and $ 5 3 4 of issue costs are incurred. The loan notes will be repayable at...

A company issues 0% loan notes at their nominal value of RM40,000. The loan notes are repayable at a premium of RM11,800 after 3 years. The effective rate of interest is 9%. Required: 1. What amount...

Reconsider Prob. 836. Using EES (or other) software, investigate the effect of the amount of electrical work supplied to the device on the minimum work and the energy destroyed as the electrical work...

Define repetitive manufacturing and compare it with job shop or batch manufacturing.

Which of the following would you expect to be found in the smooth ER ? peroxisomes glycogen phosphoipids hormone receptors

Calculate the minimum and maximum takt time for the given

Guidelines for Informative Speeches?

5. Search YouTube for a segment with a speaker giving a speech (the topic does not matter). Turn off the volume so you can only see (not hear) the speech. Analyze the physical speech delivery of the...

4. When practicing a speech, pay attention to your gestures and body movements. Practice once using movements that you feel are appropriate and comfortable; then practice in front of a friend, and...