On June 1, 2020, XYZ Company issued its 12% callable bonds in the face amount of P5,000,000 which matures on May 31, 2030. The market rate of the bonds is 9%. The interest payment date is on May 31 and November 30. XYZ Company uses the effective interest of amortizing discount and premium.

On April 30 2022, XYZ calls the entire issue at 99 and cancels it.

Use the table below to compute the present values:

	12%	9%	6%	4.5%
The present value of 1 for 10 periods	0.3220	0.4224	.5584	0.6439
The present value of 1 for 20 periods	0.1037	0.1784	0.3118	0.4146
The present value of an ordinary annuity for 10 periods	5.650	6.4177	7.361	7.9127
The present value of an ordinary annuity for 20 periods	7.469	9.1286	11.4699	13.0079

Required:

1. Compute for the issue price of the bonds. Round-off your answer to whole number.

2. Complete the amortization table below: Round-off your answer to whole numbers.

Date	Int payment	Interest Expense	Premiium or Discount Amortization	UnAmortized Premium/Discount	Carrying Value
June 1, 2020
November 30, 2021
May 31, 2021

3. Compute for the amount of interest expense recorded on the December 31, 2020 journal entry.

4. Compute for the carrying amount of the Bonds Payable on December 31, 2020.

5. Prepare the journal entries to record the payment of interest on April 30, 2022.

Accounts Debited	Accounts Credited	Dr.	Cr.
Interest Expense
Interest Payable
Premium on Bonds Payable
	Cash
	Discount on Bonds Payable

6. Prepare the journal entries to record the retirement of bonds on April 30, 2022.

Accounts Debited	Accounts Credited	Dr.	Cr.
Bonds Payable
Premium on Bonds Payable
Loss on retirement of Bonds
	Cash
	Gain on retirement of Bonds
	Discount on Bonds Payable