Question
PLEASE HELP ME TO ANSWER THE FOLLOWING: 1. White Corporation issues P500, 000 of 9% bonds, due in 10 years with interest payable semi annually.
PLEASE HELP ME TO ANSWER THE FOLLOWING:
1. White Corporation issues P500, 000 of 9% bonds, due in 10 years with interest payable semi annually. At the time of issue the market rate for such bonds is at 10%. Compute the issue price of the bonds.
2. Blue Corporation issued a 10 year bonds on January 1, 2019. Costs associated with the bond issuance were P1, 600,000. Blue Corporation uses the straight line method to amortize bond issue costs. Prepare the December 31, 2019 entry to record the 2019 bond issue cost amortization.
3. Green Corporation issued a P4, 000,000 of 6% bonds on May 1, 2019. The bonds were dated January 1, 2019, and mature January 1, 2024, with interest payable July and January. The bonds were issued at face value plus accrued interest. Prepare Green's journal entries for (a) the May issuance (b) the July 1 interest payment (c) December 31 adjusting entry.
4. On January 1, 2019, Black Corporation issued P6, 000,000 of 7% bonds, due in 10 years. The bonds were issued for P5, 592,240, and pays interest each July 1 and January 1 Black Corporation uses the effective interest method. Prepare the company's journal entries for (a) January issuance (b) the July 1 interest payment (c) the December 31 adjusting entry. Assume an effective interest rate of 8%
5. On January 1, 2019, Violet Corporation retired P5, 000,000 of bonds at P99. At the time of retirement, the unamortized premium was P150, 000 and unamortized bond issue costs were P52, 500. Prepare the journal entry to record the reacquisition of the bonds.
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