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What is the carrying value of the financial asset

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Reference no: EM133188538

Question - On 1 January 2021, Lundstram Limited acquired debentures as a financial asset at their nominal value of £10 million. The debentures carry fixed coupon interest of 8% which is receivable annually in arrears. An additional premium is payable on redemption of the debentures. Transaction costs associated with the acquisition were £96,000. The effective rate of interest was 9% and the amortised cost method is to be adopted for this asset.

Required - What is the carrying value of the financial asset as at 31 December 2021?

A. £10,096,000

B. £10,204,640

C. £10,100,000

D. £11,004,640

Reference no: EM133188538

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