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P2-D2.
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akka17bakka
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Hello Tutor,
Could you kindly explain this schedule to me? What is the difference between interest receive and interest income here?Purchased 8%loan notes = $100000
Effective rate = 10%Amortisation schedule:
B/d $100000
Interest received = $8000 ( 1000000*8%)
Interest income = $ 10,000 (100000*10%)
Amortisation – cash to be recived = 10,000- 8000 = $2000
P2-D2
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Hi,
The terminology used here is very confusing. The $8,000 is the interest income recognised through profit or loss. The $10,000 is the coupon cash receipt that reduces the outstanding loan notes balance.
Thanks
akka17bakka
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