Prepare an amortisation schedule for the debenture liability issued on January 1, 20X1.

Here is the complete solution to Question 1:

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 = $90\% \times \text{N}80,000 = \text{N}72,000$
• Transaction Cost = N4,500
• Initial Carrying Amount (1st Jan 20X1) = $\text{N}72,000 - \text{N}4,500 = \text{N}67,500$
• Redemption Value (31