1. Issuance of Bonds on Interest Dates

Zamboanga Company

On January 1, 2018, Zamboanga Co. issued 10%, three-year P1,000,000. Interests on these bonds are due annually every year-end.

Required: Necessary journal entry/ies on the date of issuance under the following independent situation:

a. Bonds were issued at face amount

b. Bonds were issued to yield 8%

c. Bonds were issued to yield 12%

d. Bonds were issued to yield 12% but were quoted at 98

1. Issuance of Bonds at a Premium

Sibugay Corporation is authorized to issue P1,000,000 of 5-year bonds dated June 30, 2018 with a stated interest rate of 10%. Interest on the bonds is payable semi-annually on June 30 and December 31. The company uses the effective interest method. The bonds were sold to yield 8%.

Required: Determine the following (Round off present value factors to four decimal places.

a. Bond issue price

b. Interest expense for 2018 and 2019

c. Carrying value of the bonds on December 31, 2018 and 2019.

1. Issuance of Bonds on Interest Dates Zamboanga Company On January 1, 2018, Zamboanga Co. issued 10%, three-year P1,000,000. Interests on these bonds are due annually every year-end. Required: Necessary journal entry/ies on the date of issuance under the following independent situation: a. Bonds were issued at face amount b. Bonds were issued to yield 8% C. Bonds were issued to yield 12% d. Bonds were issued to yield 12% but were quoted at 98 2. Issuance of Bonds at a Premium Sibugay Corporation is authorized to issue P1,000,000 of 5-year bonds dated June 30, 2018 with a stated interest rate of 10%. Interest on the bonds is payable semi-annually on June 30 and December 31. The company uses the effective interest method. The bonds were sold to yield 8%. Required: Determine the following (Round off present value factors to four decimal places. a. Bond issue price b. Interest expense for 2018 and 2019 c. Carrying value of the bonds on jDecember 31, 2018 and 2019