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What would be the accounting entries for a interest-free loan for example of 5,000 at market IR of 10% granted for 5 years?
I calculated Y1 value= 5,000*1/1.1^5= 3,105
Y2 value= 5,000*1/1.1^4= 3,415
Unwinding of the discount = 310
How all these be accounted for?
The initial recognition of the loan? And the amortized cost?
It is not given any example in the BPP textbook.
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