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How much is the gain on retirement of bonds

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Reference no: EM133160626

Question - On January 1, 2021, Nebraska Company issued a 3-year bond with face value of P1,500,000 and a 9% stated rate. The bonds mature on January 1, 2024 and interest is payable annually on December 31. The bonds are issued with an effective yield of 10%. The company also paid bond issue costs. Because of the bond issue costs, the adjusted effective rate is 11%.

Required -

1. Assuming that the bonds was retired on June 30, 2023 at total payment of P1,520,000. How much is the gain on retirement of bonds?

2. How much is the carrying value of the bonds in its December 31, 2022 statement of financial position?

Reference no: EM133160626

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