What is discount or premium from issuance of bonds payable

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Q1. On April 1, 2018, ABC Company issued at 99 plus accrued interest 2,000 at 8% P1,000 face value bonds. The bonds are dated January 1, 2018, mature on January 1, 2028, and pay interest on January 1 and July 1. The entity paid bond issue cost of P70,000. From the bond issuance, what is the net cash received?

a. 2,020,000

b. 1,980,000

c. 1,950,000

d. 1,910,000

e. None of the choices

Q2. Aye Company is authorized to issue P10,000,000 of 6%, 10-year bonds dated July 1, 2015 with interest payments on June 30 and December 31. When the bonds are issued on November 1, 2015, the entity received cash of P10,300,000. What is the discount or premium from the issuance of the bonds payable?

a. 300,000 bond premium

b. 100,000 bond premium

c. 300,000 bond discount

d. P0

e. None of the choices

Reference no: EM132798272

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