ACCA FA · Chapter 9 · Question 4 of 10
On 1 April 20X5, a company issued $250,000 of 8% loan notes. Interest is paid every six months on 30 September and 31 March. What is the interest accrual required in the statement of financial position at 31 December 20X5?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) $5,000
Explanation
Finance cost for April to December = $250,000 x 8% x 9/12 = $15,000. Interest paid on 30 September for April to September = $250,000 x 8% x 6/12 = $10,000. Accrual = $15,000 - $10,000 = $5,000, covering October to December. $15,000 is the total charge to profit or loss, not the accrual.
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