Question
In the Intermediate Accounting in book of Millan in accounting of bonds issuance please answer with complete solutions On January 1, 2020, Gwapo Company issued
In the Intermediate Accounting in book of Millan in accounting of bonds issuance please answer with complete solutions
On January 1, 2020, Gwapo Company issued 12%, 5-year, P5,000,000 bonds for 98 less bond issue cost of P50,000. Principal is payable upon maturity while interest is due annually
On July 31, 2022, the bonds were retired at 99 plus accrued interest.
Required:
- Prepare the necessary journal entries from the issuance of the bonds on January 1, 2020 up to its retirement on July 31, 2022.
- What is the effective interest rate
- What was the carrying amount of the bonds on its retirement date, July 31, 2022?
- How much is the gain or loss on extinguishment
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Part 1 Journal Entries January 1 2020 Cash 4950000 Discount on Bonds Payable 50000 Bonds Payable 500...Get Instant Access to Expert-Tailored Solutions
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Get StartedRecommended Textbook for
Intermediate Accounting IFRS
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
3rd edition
1119372933, 978-1119372936
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