Vivek plc issues three debt instruments, all with a nominal value of £100,000 redeemable in TWO years. The implicit rate of interest for all the financial instruments is 10%.
Required: Explain (using calculations as appropriate), how EACH of the following financial instruments should be dealt with in the financial statements, for the two years (the coupon rate refers to the rate of interest):
The first has a coupon rate of 0%, and the debenture is redeemed at a premium of £21,000.
The second has a coupon rate of 0% and the debenture is issued at a discount of £17,355.
The third has a coupon rate of 2%, and the debenture is issued at a discount of £5,000 and redeemed at a premium of £10,750
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Vivek plc issues three debt instruments, all with a nominal value of £100,000 redeemable in TWO years. The implicit rate of interest for all the financial instruments is 10%.
Vivek plc issues three debt instruments, all with a nominal value of £100,000 redeemable in TWO...
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