My company secured a 5 year USD 50 million euro bond @ 8% interest payable semi annually on the 22nd of December 2014 . I have treated the receipt of the bond proceeds and accrued interests by;
Crediting Bond Payable
For interest accrued;
Debiting Interest Expense
Crediting Interest Payable
However, i would like to know if my treatment is correct based on IFRS standard. If no, how should the transactions be posted in our books?
Should the interest payable not be Dr interest expense Cr Bond Payable?
Hi Jamiu, your treatment of the accrued interest is good and correct, though the accrued interest payable cld reduce the interest payable, i.e, if for example 1000 was your interest payable and 2000 has risen as a current liability your accrued interest will be 1000 which will be Credited. so your treatment is correct. Thank you.