QUESTIONS 45 THROUGH 68 RELATE TO FINANCIAL STATEMENT ANALYSIS

66. - MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2012
MOCK AND SAMPLE EXAMS CFA LEVEL I MOCK EXAM MORNING 2012
66. On 1 January 2009, a company that prepares its financial statements according to IFRS issued bonds with the following features: • Face value £20,000,000 • Term 5 years • Coupon rate 6% paid annually on December 31 • Market rate at issue 4% The company did not elect to carry the bonds at fair value. In December 2011 the market rate on similar bonds had increased to 5% and the company decided to buy back (retire) the bonds after the coupon payment on December 31. As a result, the gain on retirement reported on the 2011 statement of income is closest to: A. £340,410. B. £371,882. C. £382,556.