Lonergan’s year end is 30 September. On 1 January 2018, Lonergan took out a business loan amounting to £100,000 with annual interest of 6%. The interest is payable in equal instalments on the first day of April, July and October in arrears.

How much should be charged to the statement of profit and loss account (SPL) for the year ended 30 September 2018, and how much should be accrued for inclusion in the statement of financial position (SFP)?

SPL SFP

a) £6,000 £1,500

b) £4,500 £1,500

c) £4,500 -

d) £3,000 £1,500

 

Answer rating: 100% (QA)

In this situation the loan is taken out on 1st January 2018 and the companys financial year ends on ... View the full answer