Problem 5-24 (IFRS) Prob On January 1, 2020, Mariel Company issued bonds payany, On JI with face amount of P8,000,000 and 10% stated interest res for 14 at 95. The entity paid bond issue cost of P150,000. The bond were have a 5-year term and interest is payable annually ever every December 31. The liabi The entity elected the fair value option. On December 31 2020, the fair value of the bonds is 105. On P1, attr It is reliably determined that the fair value increase comprised P150,000 attributable to credit risk and the 1. remainder attributable to change in the market interest rate 1. What is the interest expense for 2020? a. 800,000 b. 760,000 c. 840,000 2 d. 880,000 2. What amount of gain or loss should be recognized in profit or loss for 2020 to conform with the fair value option. a. 650,000 gain b. 650,000 loss c. 800,000 gain d. 800,000 loss 3. What is the carrying amount of the bonds payable ca December 31, 2020? a. 8,000,000 b. 7,600,000 C. 8,400,000 d. 7,640,000 4. Prepare journal entries for 2020