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Does anyone know if In Q1 Issue of loan notes was part of consideration and if it was how much was the figure?
I hate to say it but I don’t think it matters anymore. We can forget all about exams for a couple of months!!
The total amount of equity purchased ($4,000) divided by number of shares, for which the loan note was issued (I don’t remember exactly but say 200 shares) multiplied by par value, that is $100.
The relevant questions (for loan note issue on acquisition) are:
1. Q1 – Dec 2004 Holdrite
2. Q1 – Dec 2006 Hosterling
3. Q1 – Jun 2007 Parentis
4. Q1 – Jun 2009 Pacemaker
5. Q1 – Jun 2010 Picant, etc. etc.Moreover, the examiner explicitly said that the issue of loan note has been recorded, so there was no need to add the resulting amount in Loan Notes figure in Non-current Liabilities.
However, shares capital was to be increased and share premium added in balance sheet.
HTH
Thank you for your answers. My calculation was 800,000 ($4,000,000/500shares X $100). It is good to know that someone else has the same answer.
I havent added this figure since already recorded, but it was needed for goodwill calculation.
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