N
Number 6
Member
I have a point regarding this question that is bugging me, it may just be my interpretation of the wording but I wanted to make sure.
The question is about altering the pending income statement and statement of financial position to include a new investment. We are preparing reports for the financial year ending 31 December 2010, with the loan kicking in on 1 October 2010. The question states that interest isn't due to start being paid until 30 September 2011.
The answer includes 1/4 of a year's worth of interest payments. My understanding of the above is that no interest has yet been paid so is this a way of apportioning some of the future interest into this financial year so that it matches the loan being taken out? In which case, is the date of the start of interest payments irrelevant as soon as we see that isn't made until 2011?
Any help would be much appreciated!
The question is about altering the pending income statement and statement of financial position to include a new investment. We are preparing reports for the financial year ending 31 December 2010, with the loan kicking in on 1 October 2010. The question states that interest isn't due to start being paid until 30 September 2011.
The answer includes 1/4 of a year's worth of interest payments. My understanding of the above is that no interest has yet been paid so is this a way of apportioning some of the future interest into this financial year so that it matches the loan being taken out? In which case, is the date of the start of interest payments irrelevant as soon as we see that isn't made until 2011?
Any help would be much appreciated!