The ACCA Learning Community
Learning Channels

redeemable preference shares and debt instruments

0 Votes
redeemable preference shares and debt instruments

What is the easy way to remember  when to calculate the present value? For example 

On 1 July 20X7, a company purchased a five-year loan note investment with a par value of $7m. The investment was purchased at a 12% discount. The loan note has a coupon rate of 5% and an effective interest rate of 7%. Interest is receivable annually in arrears. The company has the intention of holding the loan note to receive the contractual cash flows.                                                                           

How much finance income should be reported in the statement of profit or loss of the company for the year ended 30 June 20X9 (to the nearest $'000)?  Answer is 437 

May 19th 2023 AN ACCA USER

Retagged May 19th 2023

Please log in or register to reply to this question.

84 student(s) online now