What is the carrying amount of the bonds on December

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Question - The Raymore Company acquired 10-year bonds on January 1, 2019 to be held as FAAC. The 15% bonds have a face value of P1,000,000 and pay interest every January 1 and July 1. The bonds were sold for P1,172,050 based on the market interest rate of 12%. Raymore uses the effective-interest method to amortize bond discounts and premiums.

Required -

1. What is the interest income to be reported for the year ended December 31, 2019?

2. What is the carrying amount of the bonds on December 31, 2019?

3. What is the carrying amount of the bonds on December 31, 2020?

Reference no: EM132978075

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