Reference no: EM132763659

Questions -

Q1. Jam Company had P5,000,000 note payable due on March 1, 2021. The entity borrowed P3,500,000 on February 1, 2021 which had a five-year term and used the proceeds to pay down the note and used other cash to pay the balance. The December 31, 2020 financial statements were issued on March 31, 2021. What amount of the note payable should be classified as noncurrent on December 31, 2020?

Q2. On January 1, 2020, Marsh Company issued 10% bonds payable in the face amount of P6,000,000. The bonds mature on January 1, 2023. The bonds were issued for P5,316,000 to yield 12%, resulting in bond discount of P684,000. The entity used the effective interest method of amortizing bond discount. Interest is payable January 1 and July 1. For the six months ended June 30, 2020, what amount should be reported as bond interest expense?