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Financial Instrument

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Financial Instrument

  • This topic has 1 reply, 2 voices, and was last updated 7 years ago by MikeLittle.
Viewing 2 posts - 1 through 2 (of 2 total)
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    Posts
  • May 16, 2018 at 1:14 pm #452264
    marine09
    Member
    • Topics: 13
    • Replies: 6
    • ☆

    Sir,

    When a company issues a loan note and there’s a transaction cost , this reduces the value of the liability right ? However , what is the accounting entry of the transaction cost ? Does it go to the Income Statement as an expense ?

    May 16, 2018 at 2:41 pm #452282
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23327
    • ☆☆☆☆☆

    Think “double-entry” and you’ve just stated that the transaction costs reduce the liability

    What entryis needed to reduce a liability?

    Debit

    So there’s the debit and the credit is …

    … in Cash

    OK?

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  • The topic ‘Financial Instrument’ is closed to new replies.

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