Hi guys. Want to run by you if you think the below entries make sense under IFRS.
Preference shares of 100, classified as equity, has 7% dividend and 4% redemption premium. Matures in 7y.
Initial recognition:
Dr Cash 100
Cr Preference shares (equity) 100
After year 1, dividend is paid and redemption premium starts to accrue:
Dr Preference shares reserve (equity) 7 (100*7%)
Cr Cash 7
Dr Equity 4/7 (100*4%*7y)
Cr Redemption reserve 4/7
What do you think guys?
Thanks