Question
On January 1, 2020, Veruska Company issued 3-year bonds with a face amount of P3,000,000 at P97. Additionally, the entity paid a bond issue cost
On January 1, 2020, Veruska Company issued 3-year bonds with a face amount of P3,000,000 at P97. Additionally, the entity paid a bond issue cost of P59,400.
The nominal rate is 8% and the effective rate after considering bond issue cost is 10%.
The interest is payable annually on December 31. The entity used the effective interest method.
The entity used 2 decimal places for the PVF.
1. How much is the carrying amount of the bonds payable on January 1, 2020?
2. How much is the carrying amount of the Bonds payable on December 31, 2020?
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Intermediate Accounting
Authors: James D. Stice, Earl K. Stice, Fred Skousen
16th Edition
324376375, 0324375743I, 978-0324376371, 9780324375749, 978-0324312140
