On $1$ July $20$X$5$ ABC Ltd purchased a debenture with the following conditions:

Maturity periods: $4$ years

Face value on redemption $=$$$5742836$

Coupon rate $=2\%($payable on $30$ June each year$)$

Effective interest rate $=9\%$

ABC Ltd classifies the debenture as a debt instrument and uses the fair value through OCI method.

On $30$ June $20$X$6,$ the effective interest rate is changed to $2\%.$ What is the change in the balance of the debenture caused by the change in interest rate for the

year ended on $30$ June $20$X$6$:

PLEASE ENTER YOUR ANSWER IN WHOLE NUMBERS WITH NO COMMAS OR DOLLAR SIGNS $($EG$,$ FAIR VALUE GAIN OF $$1,000,000$ SHOULD BE SHOWN AS

$1000000$; FAIR VALUE LOSS OF $-$$$1,000,000$ SHOULD BE SHOWN AS $-1000000).$

Answer:On $1$ July $20$X$5$ ABC Ltd purchased a debenture with the following conditions:

$$ Maturity periods: $4$ years

$$ Face value on redemption $=$ $$5742836$

$$ Coupon rate $=2\%($payable on $30$ June each year$)$

$$ Effective interest rate $=9\%$

ABC Ltd classifies the debenture as a debt instrument and uses the fair value through OCl method.

On $30$ June $20$X$6,$ the effective interest rate is changed to $2\%.$ What is the change in the balance of the debenture caused by the change in interest rate for the year ended on $30$ June $20$X$6.$