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 Ted Ltd's Financial Statements on 30 June 2020 given the change of credit rating? A gain of $9,508 No impact A gain of $6,718 A loss of $9,508 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 Ted Ltd's Financial Statements on 30 June 2020 given the change of credit rating? A gain of $9,508 No impact A gain of $6,718 A loss of $9,508
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ANSWER A NO IMPACT REASON There is a contract between Ted company and Smith company ... View the full answer
Related Book For
Macroeconomics Principles and Policy
ISBN: 9780324586213
11th Edition
Authors: William J. Baumol, Alan S. Blinder
Posted Date:
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