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An organisation year end is 30september. On 1jan 2006 the organisation took out a loan of 100000dollers with an interest 12% the interest is payable in equal installments of the first day of april, july, oct, jan in arrears how much should be charged in sopl and sofp on year end 30september?
The loan is taken on 1st Jan. The year end is 30 Sep.
So the interest expense will be for the 9 months (Jan-Sep). This amount will be included in SOPL.
In SOFP, the Accrued Interest amount will be included. Since company pays in arrears, so the accrued interest for the quarter July-Sept will be paid on 1st Oct 2006 (first day of next financial year). This amount will be included in SOFP.
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