Reference no: EM133079549

Question 1 - On September 1, 2020, Diaz Company borrowed on a P1,650,000 note payable from Malayan Bank. The note bears interest at 12% and is payable in three equal annual payments of P550,000. On this date, the bank's prime rate is 11%. The first annual payment for interest and principal was made on September 1, 2021. At December 31, 2021, what amount should Diaz Company report as accrued interest payable?

a. P66,000

b. P60,500

c. P44,000

d. P40,333

Question 2 - In its 2021 financial statements, Ferrolino Company reported interest expense of P85,000 in its statement of comprehensive income and cash payments for interest at P68,000 in its statement of cash flows. There was no prepaid interest or interest capitalization either at the beginning or end of 2021. Accrued interest payable at December 31, 2020 was P15,000. What amount should Ferrolino Company report as accrued interest payable in its December 31, 2021 statement of financial position?

a. P32,000

b. P17,000

c. P15,000

d. P2,000