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Dear lecturer :
Could you please explain me this following phrase:
On 30 September 2012, the company redeemed $250,000 of loan notes at par, paying interest due to that date.
What does this phrase mean? Does it refer to redeemable loan note or what ?Yes – it refers to redeemable loan notes!
It means that they repaid $250,000 of loan notes and paid $250,000 to repay them.
They also paid the interest on them for the period to 30 September 2012.Does it mean company gets repaid of $250,000 from loan note owner or they pay $250,000 to loan note owners ?
Loan notes are the same as bonds and debentures and are money borrowed by the company. When they redeem them they repay the people who lent the money i.e. the holders of the loan notes.
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