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What amount of premium on bonds payable is recognized

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On January 1, 2020, the Blue Company issued P4,000,000 bonds. The bonds pay interest annually at 12% on the outstanding balance. The face value of the bonds is payable in installments of P1,000,000 every December 31, starting December 31,2020. The bonds were sold at a price that yields 8%. 

Problem 1: What amount of premium on bonds payable is recognized on January 1, 2020?

Problem 2: What is the amount of interest expense and bond premium amortization, respectively for 2020?

Problem 3: What is the bond's carrying value at December 31, 2021?

Reference no: EM132853349

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