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financial instrument

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › financial instrument

  • This topic has 2 replies, 2 voices, and was last updated 8 years ago by MikeLittle.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • March 30, 2017 at 8:18 pm #379682
    kaimingsong
    Participant
    • Topics: 15
    • Replies: 11
    • ☆

    lets say, a company issue a loan note with $500,000 and will redeem the loan note after 5 years .

    What is amount shall be recognise where the loan note was issue , just take the $500,000 or we shall discount the loan amount to the present value and recognise the present value of $500,000 ?

    March 30, 2017 at 8:40 pm #379683
    kaimingsong
    Participant
    • Topics: 15
    • Replies: 11
    • ☆

    Also , if we recognise the present value of the loan note , what is the treatment for the balancing figure ?

    March 31, 2017 at 12:50 pm #379767
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23303
    • ☆☆☆☆☆

    Question 1 – recognise the present value of all the payments connected with this loan note. So set out a table of interest payments for the next 5 years and discount all of those payments to present value as well as the $500,000

    Question 2 – other components of equity

    OK?

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Viewing 3 posts - 1 through 3 (of 3 total)
  • The topic ‘financial instrument’ is closed to new replies.

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