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What would be the carrying amount of the bonds on December

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Question - MIRANDA CO. is planning to put a new factory building to cope with the high demands of its product. To fund this project, MIRANDA issued a P10 million, 12% bond for P10.8 million including accrued interest of P200,000 on December 1, 2018. Interest on this financing is paid every beginning of October and April. The carrying amount of the bonds on December 31, 2020 was reported at P10.3 million. In the beginning of September 2021, a large amount of cash was saved and MIRANDA reacquired the bonds at face value plus accrued interest. Straight line amortization is used for discounts, premiums and bond issue costs. What would be the carrying amount of the bonds on December 31, 2019? What is the gain (loss) on the early extinguishment of debt?

Reference no: EM132858837

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