A 5% loan note was issued on 1st April 2020 at its face value of £40 million. Direct costs of the issue were £2,000,000. The loan note will be redeemed on 31st March 2023 at a substantial premium. The effective interest rate applicable is 10% per annum. At what amount will the loan note appear in the statement of financial position as at 31st March 2022 ? A. £39,800 B. £41, 780 C. £39,780 D. £43,780

A 5% loan note was issued on 1st April 2020 at its face value of £40 million. Direct costs of the issue were £2,000,000. The loan note will be redeemed on 31st March 2023 at a substantial premium. The effective interest rate applicable is 10% per annum. At what amount will the loan note appear in the statement of financial position as at 31st March 2022 ? A. £39,800 B. £41, 780 C. £39,780 D. £43,780

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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