Prepare an amortisation schedule for a debenture liability, including initial carrying amount calculation.

April 4, 2026Accounting

ScanSolve AI Answer

April 4, 2026

Answer

N80,000

Here is the completed amortisation schedule for Question 1(a):

Q1(a) Amortisation Schedule

The initial carrying amount of the debenture liability is calculated as the issue price less transaction costs.

Nominal Value = N80,000
Issue Price = 90% of N80,000 = N72,000
Transaction Cost = N4,500
Initial Carrying Amount (1st Jan 20X1) = N72,000 - N4,500 = N67,500
Redemption Value (31st Dec 20X5) = Nominal Value + Premium = N80

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Quick Answer

Q1(a) Amortisation Schedule The initial carrying amount of the debenture liability is calculated as the issue price less transaction costs.

Asked on April 4, 2026Accounting

This accounting problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.

ScanSolve AI AnswerAnswered on April 4, 2026

Here is the completed amortisation schedule for Question 1(a): Q1(a) Amortisation Schedule The initial carrying amount of the debenture liability is calculated as the issue price less transaction costs. Nominal Value = N80,000 Issue Price = 90% of N80,000 = N72,000 Transaction Cost = N4,500 Initial Carrying Amount (1st Jan 20X1) = N72,000 - N4,500 = N67,500 Redemption Value (31st Dec 20X5) = Nominal Value + Premium = N80