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B. Wipro PLC raises finance by issuing zero coupon bonds at par on the first day of the current accounting period with a nominal value

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B. Wipro PLC raises finance by issuing zero coupon bonds at par on the first day of the current accounting period with a nominal value of Rs 400,000. The bonds will be redeemed after two years at a premium of Rs 57,960. The effective rate of interest is 7%. Required: Explain and illustrate how the loan is accounted for in the financial statements of Wipro PLC. (06 Marks)

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