Which of the Following Are Allowable Methods of Dealing with a Premium

question 8

Multiple Choice

Which of the following are allowable methods of dealing with a premium on issue of debentures?
1) Amortise the premium by straight line over the life of the debenture as an annual period revenue to profit and loss
2) Amortise the premium by reducing balance over the life of the debenture as an annual period revenue to profit and loss
3) Recognise the whole premium immediately as a period revenue
4) Amortise the premium by adjusting (reducing) interest expense over the life of the debenture

• A)1 and 2
• B)1, 2 and 4
• C)1, 2, 3 and 4
• D)4 only

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Definitions:

Carbonate Rocks

Sedimentary rocks composed primarily of carbonate minerals, such as limestone and dolomite, often formed from the accumulation of marine organisms' shells.

Wet Environments

Areas characterized by high moisture levels, which can significantly influence local ecosystems and geology.

Clastic Sedimentary Rocks

Clastic sedimentary rocks are formed from the accumulation and lithification of mechanical weathering debris, consisting mostly of fragments of older rocks.

Sociotechnical

Relating to the interaction between social and technical elements within an organization, focusing on the relationships between people and technology in work environments.