Hi,
If one issues 100,000$ debentures at Par and incurs 10,000$ issue costs the opening balance will be 90,000$. If we use EIR method to amortise it, then
What will be the Par value that those debentures could be redeemed at the end of last year?
100,000$
90,000$ or
Closing balance in the amortisation table?
Txs.
Ask the Tutor ACCA FR
Debenture redeemed at par
Hi,
If they are redeemed at par then it will be the $100,000 par value. The $10,000 issue costs are an accounting adjustment and not an adjustment to the par value of the debentures themselves.
Thanks
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