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Find the interest expense to be recognized by abc inc

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Problem 1: On January 1, 2011, ABC Inc. issued a 3-year term bonds payable with face value of P1,000,000 at 97. The annual interest of 10% is payable annually every December 31. ABC Inc. incurred and paid transaction cost related to issuance of stocks in the amount of P18,037. On December 31, 2021, the quoted price of the bonds is at 102. The increase in the fair value of the bonds payable attributable to credit risk amounted to P20,000. the interest expense to be recognized by ABC Inc. for the year ended December 31, 2011 if it classified the bonds payable at financial liability at amortized cost?

a. P100,000
b. P95,196
c. P114,236
d. P116,400

Reference no: EM132774690

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