7 Loan interest / preference dividends Question 5

1) Because the issue costs are debited to the loan account itself 2) Because that's what we're told to do - it's the rule!

We used both rates in question 3! 800 represents 6/12 x 2% x 80,000. The effective rate is 6%. 6% x 80,000 for half a year is 2,400. 800 has been paid So we need to accrue a further 1,600 Ok?