I know we have done this in Level 1. But I have the following confusion:
the interest accrued is 10% on previous year. Hence there should be no interest paid in year 1. In year 2, the beginning baalnce is 71321 and the interest is 10% of beginning balance. My question is that the interest of 7132.1 is shown as interest expense in year 1 in the Income statement where as in cash flow statement the same interest expense of 7132.1 is shown in year 2. am confused
In my opinion that interest expense of 7132.1 should be shown for year 2 in Income statement as well, what am missing here
Thanks for you help.
Saurabh
the interest accrued is 10% on previous year. Hence there should be no interest paid in year 1. In year 2, the beginning baalnce is 71321 and the interest is 10% of beginning balance. My question is that the interest of 7132.1 is shown as interest expense in year 1 in the Income statement where as in cash flow statement the same interest expense of 7132.1 is shown in year 2. am confused
In my opinion that interest expense of 7132.1 should be shown for year 2 in Income statement as well, what am missing here
Thanks for you help.
Saurabh