Reference no: EM133118688
Question - At December 31, 2016, ACE Corporation had the following liability account balances:
11% Bonds payable at face value P2,500,000
Premium on bonds payable 176,190
Notes payable to CRC -due December 31, 2019 1,000,000
Transactions during 2017 and other information affecting these accounts were as follows:
1. The bonds were issued on December 31, 2014 for P2,689,000 to yield 10%. The bonds mature on December 31, 2031. Interest is payable every December 31.
2. The notes payable to CRC was issued on December 31, 2016 in exchange for a land with a market value of P750,000. The nominal rate for a note of this type is 10%.
3. On October 2, 2017, ACE borrowed P2,000,000 at 10% evidenced by a note payable to BPI. The note is payable in 5 equal annual installments of P527,600. The first installment payment is due on October 2, 2018.
Required -
1. How much is the bond premium amortization in 2017?
2. What is the carrying value of Bonds payable on December 31, 2017?
3. How much is the interest expense on bonds payable in 2017?
4. The current portion of notes payable - BPI on December 31, 2017 is?
5. Total interest expense in 2017 is?
6. The accrued interest payable at the end of 2017 is?
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