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On 1 May 2019, a company which prepares financial statements to 30 April each year issues 750,000 of 3% loan stock at a discount of
On 1 May 2019, a company which prepares financial statements to 30 April each year issues 750,000 of 3% loan stock at a discount of 5%. Issue costs are 13,175. Interest is payable on 30 April each year and the stock is redeemable on 30 April 2023 at a premium of 10%. The effective rate of interest is 7.25% per annum.
* State the amount at which the loan stock should be measured on 1 May 2019.
* Calculate the amount at which the loan stock should be shown in the company's statement of financial position on 30 April 2020, 2021, 2022 and 2023.
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