Skip to content

Ask the Tutor ACCA FR

Financial Assets and Liabilities

Mmrasheedat16y ago
can u pls calculate the the current liabilty charge for me from dis question { a 2%
debenture issued in 2008 with an issue cost of 1.5m, interest rate is 6% for 6months. In 2011
investor gets 140m nd the finance cost for the year is 1.4m}. Thanks
MikeLittleMikeLittleTutor16y ago#1
I think there's too much information which you're not giving me - where have you found the q - give me a reference or a name
Mmrasheedat16y ago#2
the question was sent to me as well but here is the full question { The 2% Debenture was issued on 1 oct 2008 under term that provide for large premium upon redemption in 2011. The finance dapartment has calculated that the effective interest rate of this type of debt instrument is 6% per annum. Kasabian also paid in cash issue cost of $1.5 million; these have yet to be accounted for. Kasabian intend to hold these debentures to maturity. In Trial balance as at 31 March 2009... 2% Debenture 2011..$140,000, Debenture interest paid $1400}. thanks
MikeLittleMikeLittleTutor16y ago#3
looks like we should be accruing $2,800 (( 6% x 140,000 x 6/12 ) - 1,400 already accounted for )

this 2,800 will add on to the 140,000 and make the long term liability 142,800
Mmrasheedat16y ago#4
i mean the current liability not the long term liability.Thanks for your assistance.
MikeLittleMikeLittleTutor16y ago#5
yes, the current liability is zero - from the information you have given
Sign into reply to this topic.