- This topic has 1 reply, 2 voices, and was last updated 4 years ago by John Moffat.
- You must be logged in to reply to this topic.
Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>
When the question shows an acquisition and existing finance cost, do we saaume that existing debt will remain? Obviously there is an amount of debt already for there to be a finance charge. I am just confused, do we take existing debt and add it to new debt incurred in the sale and then use cash reserves to reduce debt level and then charge interest or do we just take the new debt and ignore existing 74 finance charge?
Unless a question says that the existing debt is repaid, then you assume it remains and then interest will be on all the debt.