Ted Ltd receives a loan of $200,000 from Smith Ltd on 1 July 2019. Ted Ltd...
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Ted Ltd receives a loan of $200,000 from Smith Ltd on 1 July 2019. Ted Ltd has the contractual obligation to repay the loan in 3 years' time. Ted Ltd currently has a AAA credit rating and can borrow at 5%. On 30 June 2020, Ted Ltd's credit rating decreases to a AA and its borrowing rate worsens to 7%. What is the impact on Smith Ltd's Financial Statements on 30 June 2020 given the change of credit rating? O A loss of $6,718 O A gain of $9,508 O A loss of $9,508 O No impact Ted Ltd receives a loan of $200,000 from Smith Ltd on 1 July 2019. Ted Ltd has the contractual obligation to repay the loan in 3 years' time. Ted Ltd currently has a AAA credit rating and can borrow at 5%. On 30 June 2020, Ted Ltd's credit rating decreases to a AA and its borrowing rate worsens to 7%. What is the impact on Smith Ltd's Financial Statements on 30 June 2020 given the change of credit rating? O A loss of $6,718 O A gain of $9,508 O A loss of $9,508 O No impact
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Fundamental accounting principle
ISBN: 978-0078025587
21st edition
Authors: John J. Wild, Ken W. Shaw, Barbara Chiappetta
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