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.
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Good Day sir,
please assistat 30 june 20×2 a company has $1m 8% loan note in issue, interest being paid 1/2 yearly on 30 june and 31 dec.
on 30 sep 20×2 the company redeemed $ 250,000 of these loan notes at par, paying interest due to that date.
on 1 apr 20×3 the company issued $500,000 7% loan notes, interest payable 1/2 yearly on 31 Mar and 30 sep
what figure should appear in the company’s statement of comprehensive income for interest payable in the year ended 30 june 20×3?
You want the actual interest expense for the year.
So from 1 June X2 to 30 September X2 the loan was $1M – there will be interest of 8% p.a. for 4 month.
From 1 October X2 to 30 June X3 the loan was $750,000 – there will be interest of 8% for 9 months
From 1 April X3 to 30 June X3 there is another loan of $500,000 – there will be interest of 7% for 3 months
Good Day John,
Thank you for your prompt reply.
I am sorry , I still do not get the below calculation.So from 1 June X2 to 30 September X2 the loan was $1M – there will be interest of 8% p.a. for 4 month.
why start from 01 june.. and not 1 july
thank you
Dear John,
Please ignore the earlier reply , I see the point now why we should start on 01 June & not 1 July.But the calculation I got is 74,792 and the nearest answer is 73750. Not exact answer.
thanks
The answer is 73750.
1000000 at 8% for 3 months is 20000
750000 at 8% for 9 months is 45000
500000 at 7% for 3 months is 8750
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