Chung plc has a financial year end of 31 December 2020. It has raised finance by issuing 100,000 4% twenty-year loan notes on 1st January 2020. The loan notes were issued at a discount of 10%, and will be ultimately be redeemed at a premium. The loan notes have an effective rate of interest of 8%. When the loan note was issued, issue costs 3,000 were incurred. Requirement In respect of Chung's issue of the loan note, calculate the following a. The initial recognition of the liability as at 1st January 2020 2 marks b. The finance cost charged to the statement of profit or loss for the year ended 31 December 2020 2 marks C. The interest paid in the statement of cash flows for the year ended 31 December 2020 2 marks d. The liability in the statement of financial position as at 31 December 2020 1 mark e. Explain why the finance cost charged in the income statement is greater than the interest paid in the cash flow statement 3 marks