Calculate a effective interest schedule

Assignment Help Financial Accounting
Reference no: EM132821621

On 1 July 2020, Gerald Ltd issues 2,000 convertible notes. The notes have a three-year term and are issued at par with a face value of $1,000 per note, giving total proceeds at the date of issue of $2 million. The notes pay interest at 6% p.a. annually in arrears. The holder of each note is entitled to convert the note into 200 ordinary shares of Gerald Ltd at contract maturity.

When the notes are issued, the prevailing market interest rate for similar debt (similar term, similar credit status of issuer and similar cash flows) without conversion options is 8% per annum.

Required

Problem a) Calculate a effective interest schedule and distinguish between the allocation of interest payments and interest expense for each reporting period during the term of the note issue.

Reference no: EM132821621

Questions Cloud

Find what will be the beta of the new portfolio : The portfolio beta is equal to 1.2 . You have decided to add another stock with a beta equal to 1.9 for $50,000. What will be the beta of the new portfolio?
Describe ideas for project-based learning activities : Create a 10- to 12-slide presentation with specific ideas for project-based learning activities to create learning environments that support individual.
Why is workplace diversity important : Why is workplace diversity important and what are two specific challenges managers may face in managing diversity and inclusion?
What is the definition of strategic management : What is the definition of strategic management. Identify its four key attributes.
Calculate a effective interest schedule : Calculate a effective interest schedule and distinguish between the allocation of interest payments and interest expense for each reporting period
Developing a behaviour support plan : Describe the steps involved in developing a Behaviour Support Plan for a child who has a behaviour of concern in an education and care service?
What is the role of him professional in consumer education : What is the role of the HIM professional in consumer education and advocacy? How will the HIM professional fit in with a facility or healthcare organization's.
Identify the behaviours or operations attributable : Identify the behaviours or operations attributable to this organisation, either currently or in the past, that could be regarded as contentious.
Compute the Capital of each partner : Interest at 15% on notes payable dated May 17, 2020 should be accrued. (Use 360 days). Compute the Capital of each partner

Reviews

Write a Review

Financial Accounting Questions & Answers

  What is breakeven point in units after giving effect to plan

Johnson, Inc. projects sales for next year will be 60,000 units if the sales price is $28. At this level, unit fixed costs will be $8 while total variable costs will be $720,000. What is the breakeven point for the company in terms of dollars and uni..

  Explain why using activity-based costing

Explain why using activity-based costing to justify not allocating corporate funds to social or environmental causes is an ethical issue

  What the importers final cost is

International ocean freight is $900. Import clearance and tariffs is $500. Inland freight in the country of importation is $200. The importer's final cost is

  Company signs note payable

A company signs a note payable for $5,000 at 11?% for 45 days. How much interest will the company owe using a? 360-day year?? (Round your final answer to the nearest? cent.)

  Find and show partial income statement for hibou

Show partial income statement for Hibou for 2020. The statement should begin with income from continuing operations and include an appropriate footnote

  Determine outstanding liability for deposits

In addition, 100,000 refillable containers were sold to new customers during the current year. Determine outstanding liability for deposits

  Define social aspects of becoming an adolescent

make sure to touch upon the physical, psychological, and social aspects of becoming an adolescent

  What type of pension plan would an employee want offered

What type of pension plan would an employee (not employer) want offered to them, a defined contribution plan or a defined benefit plan?

  Estimate the minimum price the owner of the division

Using a tax rate of 37 percent, estimate the minimum price the owner of the division should consider for its sale. (Do not round intermediate calculations.)

  Calculated chris tax liability due or refund

Solve or Calculated Chris's tax liability due or refund. Chris, a single taxpayer, had the following income and deductions during 2019

  What the journal entry recorded by melbourne ltd

On 20 June, Melbourne Ltd acquires equipment, What the journal entry recorded by Melbourne Ltd for the purchase of the equipment on 20 June is

  What other factors would you recommend to be considered

What other factors would you recommend to be considered in establishing the raw material cost standard for the new cleaner?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd