On 1 May 2017, a company which prepares to 30 April each year issues £750,000 of 3% loan stock at a discount of 5%. Issue costs are £13,175. Interest is payable on 30 April each year and the stock is redeemable on 30 April 2021 at a premium of 10%. The effective rate of interest is 7.25% per annum.
(a) State the amount at which the loan stock should be measured on 1 May 2017.
(b) Calculate the amount at which the loan stock should be shown in the company’s statement of financial position on 30 April 2018, 2019, 2020 and 2021.
