Notes and Bonds Problem

Problem 1

On January 1, 2021, Energy Company issued a 3- year, 10%, 1,000 units of P 1,000 term bonds when the market rate is 12%. Interest is payable semiannual on June 30 and December 31. DON'T round off your present value factors BUT round of your peso answers to the nearest peso.

Answer the independent questions 1 to 5

1.How much is the issued price?

2. What is the total interest in 2022 if your financial statements end every December 31?

3. To be equitable, how much will you pay on the bonds, if you will redeem them on March 1, 2022?

4.If your financial statements end every October 1, How much is the total interest in 2022?

5.How much is the balance of the bonds if you will present them in your financial statements ending October 1, 2023?

On January 1, 2021, Energy Company issued a 3- year, 12%, 900 units of P 1,000 term bonds when the market rate is 10%. Interest is payable semiannual on June 30 and December 31. The principal is due equally every December 31. DON'T round off your present value factors BUT round of your peso answers to the nearest peso.

This is for independent questions 6 to 10.

6.How much is the issued price?

7.What is the total interest in 2022 if your financial statements end every December 31?

8.To be equitable, how much will you pay on the bonds, if you will redeem them on March 1, 2022?

9.If your financial statements end every October 1, How much is the total interest in 2022?

10.How much is the balance of the bonds if you will present them in your financial statements ending October 1, 2023?