Problem 4: Computational

1. Blue Corp.'s December 31, 1991, balance sheet contained the following items in the long-term liabilities section:

93/4% registered debentures, callable in 2002, due in 2007 - 700,000

91/2% collateral trust bonds, convertible into common stock beginning in 200, due in 2010 - 600,000

10% subordinated debentures (P30,000 maturing annually beginning in 1997)

What is the total amount of Blue's term bonds?

2. On January 2, 2001, West Co. Issued 9% bonds in the amount of P500,000, which mature on January 2, 2011. The bonds were issued for P469,500 to yield 10%. Interest is payale annually on December 31. West uses the effective interest method of amortizing bond discount. In its June 30, 2001, balance sheet,what amount should West report as bonds payable?

3. On January 1, 20x1, Yoga Co. issued 1,000, P4,000 face amount bonds for P3,807,852. The bonds mature on December 31, 20x3. Interest of 10% is due annually every year-end. The effective interest rate is 12%.How much is the unamortized discount on bonds payable on December 31, 20x1?

4. On January 1, 20x1, Silent Co. issued 1,000 bonds with face amount of P4,000 each for total of P3,807,852. Silent Co. paid transaction costs of P179,316 on the issuance. The bonds mature on December 31, 20x3 but 10% interest is due every year-end. The effective interest rate adjusted for the transaction costs is 14%.How much is the carrying amount of bonds on December 31, 20x1?

5. On April 1, 20x9, Hill Corp. issued 200 of its P1,000 face value bonds at 101 plus accrued interest. The bonds were dated November 1, 20x8, and bear interest at an annual rate of 9% payable semi annually on November 1 and May 1.What amount did Hill receive from the bond issuance?

6. Tuck Co. plans on issuing three-year, 12% term bonds with face amount of P2,000,000. If the current rate on issuance date is 10%,the estimated issue price of the bonds would be?

Reference:

Intermediate Accounting 2

2021 Edition By: Zeus Vernon B. Millan

Chapter 3 Bonds Payable and Other Concept