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Financial Instruments Loan note Note 1 3 ( a ) On 1 April 2 0 X 8 Hop issued 5 0 , 0 0 0

Financial Instruments Loan note Note 13(a)
On 1 April 20X8 Hop issued 50,0005% loan notes at a discount of 5,000. These loan notes are redeemable at a premium, meaning that the effective rate of interest is 8%. The initial loan note issue has been recorded in the trial balance above. In accordance with the loan note a payment of 2,500 was made on 31 March 20X9, but this has not yet been recorded.
Financial Instruments Convertible bond Note 13(b)
On 1 April 20X8 Hop issued 30,0007% convertible bonds at par. The bond interest is payable annually in arrears, the first interest payment was made on 31 March 20X9. They have a three-year term and can be convertible into shares at the end of the term. When the bonds were issued the prevailing market interest rate for similar debt without conversion options is 9%. The relevant discount factors are shown below. No accounting entries have yet been made for this transaction.
Show the journals Cr/Dr
In the trial Balance the Loan note is (Cr)45,000
Discount factors 7%9%
Year 10.9340.917
Year 20.8730.842
Year 30.8160.772
()

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