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How much is the interest expense

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Question - On January 1, 2021, a company issued 3-year bonds with a face value of P3,000,000 for P2,850,756, net of commission to underwriters of P15,000. Effective interest rate is determined to be 10%.

The bonds carry an interest of 8% per year payable annually on December 31. The bonds are to be properly classified as financial liabilities at fair value through profit or loss.

On December 31, 2021, the bonds are quoted at 103%. Assume that there are no changes due to credit risk. On January 1, 2022, the bonds are retired at 104%.

How much is the interest expense for 2021?

Reference no: EM132982939

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