Question
JJ Company issued an 8%, P8,400,000 bonds at 120 on January 1, 2019. Interest on these bonds is paid every June 30 and December 31.
JJ Company issued an 8%, P8,400,000 bonds at 120 on January 1, 2019. Interest on these bonds is paid every June 30 and December 31. Moreover, bonds mature every December 31 at the following rates: 2020, P1,800,000; 2022, P3,000,000; 2023, P1,500,000; and 2024, 2,100,000, respectively. On December 31, 2020, P800,000 bonds maturing on December 31, 2023 were retired at 98.
1. Compute for the issue price of the bonds on January 1, 2019.
2. Compute for the bonds outstanding for the year 2020.
3. Compute for the gain/loss on retirement.
4. Compute for the premium amortization for 2021 after the retirement of bonds.
Step by Step Solution
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Step: 1
1 P10000000 The issue price of the bonds on January 1 2019 would be P10000000 P10000000 P8400000 x 1...
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Step: 2
Step: 3
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Intermediate Accounting IFRS
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
3rd edition
1119372933, 978-1119372936
