Page 19 - 32. ANALYSIS OF FS

Financial year ending on 31 Amortised cost Interest to be Repayment Amortised cost
March (opening recognised (including (closing
balance) @ 10% interest) balance)
2021 13,54,602 1,35,460 3,90,000 11,00,062

2022 11,00,062 1,10,006 3,72,000 8,38,068
2023 8,38,068 83,807 3,54,000 5,67,875
2024 5,67,875 56,788 3,36,000 2,88,663
2025 2,88,663 29,337* 3,18,000 -

* 2,88,663 x 10% = Rs. 28,866. Difference of Rs. 471 (29,337 – 28,866) is due to approximation in
computation.

Journal Entries to be recorded at every period end:

1. On 1 April 2020
Particulars Dr. Amount Cr. Amount
(Rs.) (Rs.)

Loan to employee A/c Dr. 13,54,602

Prepaid employee cost A/c Dr. 1,45,398 15,00,000
To Bank A/c
(Being loan asset recorded at initial fair value)

2. On 31 March 2021

Particulars Dr. Cr.
Amount Amount
(Rs.) (Rs.)
Bank A/c Dr. 3,90,000
To Finance income A/c (profit and loss) @10% 1,35,460
To Loan to employee A/c 2,54,540

(Being first instalment of repayment of loan accounted for using the amortised cost and effective
interest rate @ 10%)
29,080
29,080
Employee benefit cost (profit and loss) A/c Dr.
To Prepaid employee cost A/c (1,45,398/5)

(Being amortization of pre-paid employee cost charged to profit and loss as employee benefit
cost)

The Following housing loan balances should appear in the financial statements:

Extracts of Balance sheet of Star Ltd. as at 31 March 2021

Non-current asset

Financial asset
32.18