At the end of 2014,interest on a perpetual loan is paid to the holder.The perpetual debt is shown as an equity instrument.Based on the above the interest is:
A) Deducted on the income statement
B) Added to the income statement
C) Deducted for income tax purposes
D) Added for income tax purposes

Question

Quizplus · Accepted Answer

Interest on a perpetual loan treated as an equity instrument is not deductible for income tax purposes, as it is considered a distribution of profits rather than an interest expense.

At the End of 2014,interest on a Perpetual Loan Is