Page 64 - F2 Integrated Workbook STUDENT 2019
P. 64
Chapter 3
Example 3.2
On 1 January 20X5 a 5% convertible loan note is issued for $5,000. The loan is
repayable after three years for cash of $5,000 or may be converted to equity.
The market rate for loans with no conversion option is 8%.
Required:
(i) Split the loan at inception between equity and liability
(ii) Show extracts from the financial statements for the year ended
31 December 20X5.
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