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Compute for the initial carrying amount of the bonds

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Reference no: EM132670110

Problem 1: On January 1, 20x1, an entity issues bonds with face amount of P5,000,000 for P4,800,000. The bonds mature on December 31, 20x3 and pay annual interest of 10% every December 31. The entity incurs bond issue cost of P473,767. The effective interest adjusted for bond issue costs is 16%. Compute for the initial carrying amount of the bonds.

Reference no: EM132670110

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