21, Nkana Plc issued 80 million K1 preferred shares at a premium of K0.5 each. Issue Costs totalled K1.5 millio

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question 1
On 1st January 2021, Nkana Plc issued 80 million K1 preferred shares at a premium of K0.5 each. Issue Costs totalled K1.5 million. The shares carry a fixed dividend of 6%. The dividend is paid annually in arrears on the 31st of December. The shares will be redeemed on 1st January 2026 at a premium of K73.6m. The effective rate of interest on these shares is 9%.
Required:
Show how these shares will be reported in the financial Statements of Nkana plc for the years 2021 to 2025. Nkana plc’s year-end is 31st December.    

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