My client has made a loan to another group Co of £150,000.
The loan will be repaid over 3 years. The interest will be paid every 6 months.
I have recognised the loan at the initial transaction price.
I have a calculator to work out the effective interest rate - this came back at 5.062% per year. (not 100% sure I have done this correctly). this works out the interest at about £500 more than the actual interest that the Ltd Co will charge over the 4 year term.
What do I put in the accounts? Any guidance appreciated