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This topic has 5 replies, 2 voices, and was last updated 2 years ago by Tax Tutor.

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June 3, 2022 at 8:55 am #657205
xyzc
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The interest payable of 7000 is in respect of the company’s 4% loan notes which were issued on 1 july 2021. Interest of 6000 was paid on 31 december 2021 with an accrual of 1000 provided ffor at 31 january 2022. The loan notes were issued in order to finance the company’s trading activities.
I think the interest payable or finance costs have been calculated by adding 6000 and 1000 but I don’t understand why these two have been added
June 3, 2022 at 10:46 am #657230
Tax Tutor
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Once again this is a basic accounting point – the accruals system is something you should already understand and if you do not then you must go back to your basic accounting study notes!
June 3, 2022 at 7:03 pm #657285
xyzc
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I do not have basic accounting study notes, so I asked it here
June 4, 2022 at 2:25 pm #657353
Tax Tutor
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Did you pass the Financial Accounting exam?
June 5, 2022 at 2:38 pm #657443
xyzc
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Yes
June 6, 2022 at 1:10 pm #657523
Tax Tutor
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In which case you should know how to use the basic accruals concept and if you cannot remember then refer to the FA notes and lectures which are available to you on this site.
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