Loan notes
In this lesson, you'll learn what loan notes are and how to account for them in your financial statements — a key concept for FA and essential for understanding how companies raise debt finance.
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In this lesson
- 0:00 Introduction to loan notes
- 0:25 Advantages and disadvantages of loan finance
- 1:40 Accounting treatment for loan note issuance
- 2:44 Recording finance costs and interest payments
- 3:36 Worked example: Tottenham Limited loan notes
About this lesson
You'll discover the advantages and disadvantages of issuing loan notes compared to equity, work through the double-entry bookkeeping for both the initial issue and ongoing interest payments, and apply this knowledge to a practical example. By the end, you'll be confident recording loan notes as non-current liabilities and handling their associated finance costs in accordance with the accruals concept.
Duration: 5m
Transcript
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