During the year to 30 September 2014. K co made the following payments:
1. $49,815 interest on $1,107,000 9% loan stock issued on 1 January 2014. Interest is payable on 30 June and 31 December.
2. $720 dividend on $12,000 $1 6% irredeemable preference shares.
3. $350 dividend on $7,000 5% redeemable preference shares.
What should be the finance cost in the statement of profit or loss for the year ended 30 September 2014?
Suggested solutions:
| Loan Stock | 1,107,000 |
| Interest for 9 months | 74,723 |
| Redeemable Preference shares | 7,000 |
| Interest for the year | 350 |
| Answer | 75,073 |