Reference no: EM133147809

Questions -

Q1. A company issued a P3,000,000, 6-year bonds dated January 1, 2021, with a stated interest rate of 11%. Interest on the bonds is payable annually every December 31 of each year. The company's bonds were sold to yield 14%. On May 1, 2022, the company retired P 1,000,000 face value bonds at 101. How much is the gain or loss on retirement of bonds taken to profit or loss?

Q2. On April 1, 2028, A Company purchased three units of baking equipment by issuing a four-year non-interest bearing, P 3,200,000 note. The note is payable in annual installments of P 800,000. The first installment is due on March 31, 2029. There was no equivalent cash price for the equipment and the note had no ready market. The prevailing interest rate for a note of this type is 9%. The present value of 1 factor at 9% for 4 periods is 0.7084 and present value of ordinary annuity factor at 9% for 4 periods is 3.2397. How much is the total payment made on March 31, 2031?