Page 166 - SBR Integrated Workbook STUDENT S18-J19
P. 166
Chapter 12
Example 2
Loan notes
On 1 January 20X1, Poached issued $1 million 5% loan notes for $0.9 million.
In addition, it incurred transaction fees of $0.1 million. Interest is paid in
arrears. The loan notes will be redeemed in four years’ time. The effective rate
of interest is 20%.
How should the loan notes be accounted for in the year ended 31
December 20X1?
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