Liquidity Ltd's Reporting Date Is 31 March

question 27

Multiple Choice

Liquidity Ltd's reporting date is 31 March.Some time ago the company issued debentures totaling $10 million, the maturity date of which is 30 June 20X5.The directors are confident that they will be able to refinance the debt as interest rates have fallen from 12% to less than 9%.How should the debentures be classified on 31 March 20X5

• A)the whole amount is a non-current asset
• B)$7 500 000 non-current liability and $2 500 000 current liability
• C)the whole amount is a current liability
• D)given the amount of the debentures, the liquidity basis would be both more relevant and reliable, so no classification will be required

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