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Chapter 3

Example 3.3

Lucas invests $10,000 in 10% debentures. The debentures will be repaid at a
premium at the end of their term and Lucas intends to hold the debentures until
this time. The effective rate of interest is 14%.

Required:

Prepare extracts from the statement of profit or loss and statement of
financial position for years 1 and 2 of the instrument's term.

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