We want to do two things here. We want to firstly model out the company's debts fees those deputies can be amortized over time. So we're gonna have to model them out and see how they've eventually flow through into the income statements. The second thing that we want to do is model out the company's long-term debt.

Let's see that one to start with so I'm starting in F 50 and I need to go and find the new debt that's been taking on for this deal. So I go to the opening balance sheet and in the opening balance sheet are scroll down.

And there is their new long-term debt the 42,722.3. What we're not going to do is add on the Standalone depth the acquirer had already. We're just looking at the new debt because that old debt that's still there. It's already been modeled on the acquire tab. We're just looking at the new debt.

So I've got that 42,722 that then becomes my beginning balance.

We've already got a repayment schedule two and a half thousand being paid off each year. So now I can just some upwards and we've now got the ending balance. I can then copy both of them to the right.

And now that's modeled fantastic.

The debt fees are a bit more interesting.

We're going to take the debt fees and we'll find that initially on the opening balance sheets. We had them in here at 250.9. Now, if you had advisory fees such as m&a fees all that would happen in your transaction to pay them off is Cash would go down and retained earnings would go down.

Why is retained earnings gone down because the fees have gone through the income statement? It goes straight through the income statement and it's all done and finished with immediately deputies are slightly different.

Instead you put the deputies on the balance sheet and you don't put them through the income statement immediately you instead spread them over the next five incomes names or six incomes names whatever the period of the debt is.

Our debt is going to be around for five years. So we're going to spread these debt fees over five years as well.

So, let's see that being modeled out. I'm going to change this from a negative into a positive which helps with my modeling.

So my beginning balance is the same as last year's ending and then to amortize it to spread it over those five income statements. I'm going to use the minus Min function.

I'm going to take the 250 and I want to spread that over five years.

I'll find that five years on the Assumption tab.

And here we've got the debt fee amortization period of five fantastic.

So I want the minimum of that amortization figure. It's going to be about 50.

I don't want to compare that to.

The beginning balance because if the beginning balance gets to zero, I want to stop my amortization right there.

Fantastic there. We've got it. There's that 50.

And if I now some of the two above that gets me to my ending balance of 200.7.

That can then be copied to the right.

And I gradually see those debt fees disappearing off into zero that would happen the fifth year if we had it here and those amortization figures would then hit the income statement each year and we'll see that in the income statement later.

Now where would that amortization line be reported in the income statement. Would it be above ebits like we would normally see with normal amortization of intangibles? No instead. You see it further down below ebits around about your interest line.