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Sir, please I need more clarification on loan notes issued as part of consideration. Why the number of loan note issued ie 116/200 x 100 =58 is not added to P & S loan note in the SoFP as you added new issue shares to the share capital given in the question?
What makes you think that the loan notes have not already been accounted for within the Pacemaker figures in the question?
With reference to the element of the question that dealt with the acquisition of an interest in the associate, the questions says words to the effect of “this acquisition has not been recorded by the parent”
There’s no such similar comment for the acquisition of the subsidiary!
Agreed?
Thank u sir. Now I understand. Unless the question specifies, It’s assumed transactions have been recorded.
Assuming it is stated that the transaction has not been recorded, what would have been the treatment sir?
Then you would have had to record the issue of the loan note
Dr Cost of Acquisition / Investment Account. 58
Cr Long Term Liability / Loan Account. 58
(Is that the discounted amount or the face value? The amount recorded should be the discounted value if appropriate (I don’t have the question readily available))
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