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Hello,
I have one question regarding the 10% Loan notes issued by Paradigm. Why was interest not calculated on the loan notes? normally you would take the 10% of 9500 loan notes and do a time apportion, also include it in ret. earnings calculation.
Thank you.
Two points (without looking again at the question)
1) Am I not correct in saying that the loan notes were only purchased AFTER the acquisition in which case time apportionment would be irrelevant, and
2) I don’t remember anything in the question to tell me that the interest has not already been paid and accounted for within the figures given in that question
Tell me if I’m wrong
A part of loan notes were issued as a payment for the acquired shares in Strata (susidiary) 1500. The rest of 10% loan notes 8000 were already in issue at the date of acquisition.
Since in the question it was mentioned that purchase consideration was not registered I supposed that the interest would need to be registered as well for all loan notes.No, just because we didn’t record the loan notes themselves does not mean that we don’t pay the interest!
Imagine that you have lent someone / a company some money and they haven’t recorded the loan from you. Does that mean that they don’t have to pay you the interest?
Ok?
Exactly my question, why wasn’t the interest on loan registered in the answer to this question?
Because it has already been paid.
You may as well ask “Why is the detail of the telephone bill that was paid last month not been shown?”
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