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Illustration 22: Issue of borrowings with fixed rate of interest A Ltd has made a borrowing from RBC Bank for 10,000 at a fixed interest
Illustration 22: Issue of borrowings with fixed rate of interest A Ltd has made a borrowing from RBC Bank for 10,000 at a fixed interest of 12% per annum. Loan processing fees were additionally paid for 500 and loan is payable 4 half-yearly installments of 2,500 each. Details are as follows: Particulars Details Loan amount 10,000 Date of loan (Starting Date) 1-Apr-20X1 Date of loan (Finishing Date) 31-March-20X3 Description of repayment Repayment of loan starts from 30-Sept-20X1 (To be paid half yearly) Installment amount 2,500 Interest rate 12.00% Interest charge Interest to be charged quarterly Upfront fees 500 How would loan be accounted in books of A Ltd
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