Reference no: EM132899330

Questions -

Q1. On March 1, 2019, Cain Company issued at 103 plus accrued interest 4,000 bonds at 6%, 1000 face amount. The bonds are dated January 1, 2019, and mature on January 1, 2029. Interest is payable semi-annually on January 1 and July 1. The entity paid a bond issue cost of P200,000.

What is the net cash received from the bond issuance?

Q2. On July 1, 2019, Tara Company issued 4,000 bonds at 8% P1,000,000 face amount for P3,504,000. The bonds were issued to yield 12%. The bonds are dated July 1, 2019, and mature on July 1, 2029. Interest is payable semi-annually on January 1 and July 1.

Using the effective interest method, what amount of the bond discount should be amortized for the six months ended December 31, 2019?

Q3. On January 1, 2019, Masbate Company issued 5-year bonds with a face amount of 5,000,000 at 110. The entity paid bond issue cost of P100,000 on the same date. The stated interest rate on the bonds is 8% payable annually every December 31. The bonds are issued to yield 6% per annum after considering the bond issue cost. The entity used the effective interest method of amortization On December 31, 2019, what is the carrying amount of the bond?