On March 2, 2020, VWX Co. received authorization to issue P6,000,000, 5-year bonds with interest of 12%

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On March 2, 2020, VWX Co. received authorization to issue P6,000,000, 5-year bonds with interest of 12% per annum, payable every Mar. 2nd. The bonds were issued at 103.5% (net of bond issue cost) on the same date. The company will use the amortized cost method.

REQUIRED:

1. Compute for the effective interest rate. Carry computations up to the three decimal places.

2. Prepare a premium amortization table. Carry computations to the nearest whole peso.

3. Prepare the 2020 entries including year-end adjustments (Dec. 31) and a compound closing entry.

Related Book For answer-question

Financial and Managerial Accounting the basis for business decisions

ISBN: 978-0078111044

16th edition

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

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Posted Date: Aug 10, 2022 08:34 AM

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On March 2, 2020, VWX Co. received authorization to issue P6,000,000, 5-year bonds with interest of 12%

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Financial and Managerial Accounting the basis for business decisions

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