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What will the carrying value of the bonds be on the december

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Reference no: EM133036000

Questions -

Q1) On April 1, 2020, XYZ Company issued a P9,000,000 non interest-bearing note due on March 31, 2023 for a piece of land with a cash price of P6,949,800.

Required -

a. Determine the effective interest rate of the note

b. Prepare the discount amortization table over the term of the note

c. Prepare the entries for year 2020 through 2023, including any year-end adjustments.

Q2) Shoep Company was authorized to issue a 5-year, 10%, P5,000,000 bonds dated June 30, 2020. Interest is payable semi-annually on June 30 and December 31. (The company uses the effective interest method of amortization). Assuming the bonds were sold to yield: a) at 8% b) at 12%.

Required -

a. Determine the issue price of the bonds.

b. Prepare the amortization table for the entire life of the bonds.

c. Prepare the entries relating to the bonds for the year 2020 and 2021.

Q3) Farmer Company issues P10,000,000 of 10-year, 9% bonds on March 1, 2020 at 97 plus accrued interest. The bonds are dated January 1, 2020 and pay interest on June 30 and December 31. What is the total cash received on the issue date?

a. P9,700,000

b. P10,225,000

c. P9,850,000

d. P9,550,000

Q4) A company issues P20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2021. Interest is paid on June 30 and December 31. The proceeds from the bonds are P19,604,145. Using effective-interest amortization, how much interest expense will be recognized in 2021?

a. P780,000

b. P1,560,000

c. P1,568,498

d. P1,568,332

Q5) A company issues P20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2021. Interest is paid on June 30 and December 31. The proceeds from the bonds are 19,604,145. Using effective-interest amortization, what will the carrying value of the bonds be on the December 31, 2021 statement of financial position?

a. P19,612,643

b. P20,000,000

c. P19,625,125

d. P19,608,310

Reference no: EM133036000

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