Prepare a schedule of amortization

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Problem - On October 1, 2020, Complex Company purchased a 12% P3,000,000 face amount bond issue for P2, 700,000 excluding accrued interest to be held as financial asset at amortized cost. The date of the bonds is February 1, 2020 and the interest is payable semiannually on February 1 and August 1. The bonds mature annually at the rate of P1, 000,000 on February 1, 2020 and every February 1 thereafter.

Required -

a. Prepare a schedule of amortization following the bond outstanding method.

b. Prepare journal entries for 2020 and 2021.

Reference no: EM132869905

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