Debenture redeemed at par

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July 19, 2022 at 5:36 pm #661339
YG79
Member
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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.
July 24, 2022 at 6:00 pm #661740
P2-D2
Keymaster
- Topics: 4
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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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