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Prepare journal entries for the recording of interest

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Problem - Using the same information above, assume that SMPH-J bonds P100,000 face value for acquired at 95.3, 6.22% per annum coupon interest rate and an effective rate of 8% is to be held as financial asset at amortized cost. The date of issuance of the bonds is May 1, 2019 and mature on May 1, 2022. Interest is received semi-annually every May 1 and Nov 1.

Required -

a) Prepare journal entries for 2019, 2020 and 2021 for the recording of interest and year end required amortization if straight line method is used.

b) Prepare journal entries for 2019, 2020 and 2021 for the recording of interest and year end required amortization if effective interest method is used.

Reference no: EM132875424

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