Financial Instrument

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May 16, 2018 at 1:14 pm #452264
marine09
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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
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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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