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Morningside raises finance by issuing $20,000 6% four-year loan notes on the first day of the current accounting period. The loan notes are issued at

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Morningside raises finance by issuing $20,000 6% four-year loan notes on the first day of the current accounting period. The loan notes are issued at a discount of 10%, and will be redeemed after three years at a premium of $1,015. The effective rate of interest is 12%. The issue costs were $1,000. Illustrate how the loan is accounted for in the financial statements of Morningside

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