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What is the carrying amount of the bonds redeemed

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Q1. On January 1, 2019, BIG Corp. issued bonds with a par value of P800,000 at 97 (which is net of issue costs), due in 20 years. Eight (8) years after the issuance date, the entire issue is called at 101 and is cancelled. The company uses the straight-line method in amortization.

1. What is the carrying amount of the bonds redeemed?

2. What is the total loss on redemption?

3. Prepare the entry to record the reacquisition and cancellation of bonds.

Q2. On January 1, 2X19, ABC issued 9% bonds with a face value of P500,000 for P469,280 to yield 10%. The bonds' date is the same as its issuance date. It pays interest annually.

1. What is the amount of discount on the issuance date?

2. Prepare the journal entries to record interest expense on December 31, 2X19.

Reference no: EM132880611

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