Problem RCBCareful RCBCareful issued its bonds payable 3 year 10 , P10,000,000 at par to AwchCareless Corporation on December 27, 2018 The interest was payable annually There was a downward trend in the industry that RCBCareful was operating and became less liquid and is currently experiencing financial difficulties RCBCareful paid the interest for 2020 On December 31 2020 RCBCareful renegotiated the bond indenture with AwchCareless AwchCareless agreed to the following modifications The interest rate will be 9 Transaction costs of P100,000 was incurred New maturity date will be on December 31, 2023 The effective rate after considering the transaction cost is 10 412 Question 1 What is the carrying value of the revised loan as of the date of modification Question 2 How much is the interest expense for 2021 Question 3 Assuming instead of renegotiating, RCBCareful retired the bonds for P9,150,000 on December 31, 2020 How much was the total cash paid to the bondholder on this date

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Problem RCBCareful RCBCareful issued its bonds payable 3-year 10%, P10,000,000 at par to AwchCareless Corporation on December 27, 2018. The interest was payable annually. There

Problem RCBCareful

RCBCareful issued its bonds payable 3-year 10%, P10,000,000 at par to AwchCareless Corporation on December 27, 2018. The interest was payable annually. There was a downward trend in the industry that RCBCareful was operating and became less liquid and is currently experiencing financial difficulties. RCBCareful paid the interest for 2020. On December 31 2020 RCBCareful renegotiated the bond indenture with AwchCareless.

AwchCareless agreed to the following modifications:

The interest rate will be 9%
Transaction costs of P100,000 was incurred.
New maturity date will be on December 31, 2023
The effective rate after considering the transaction cost is 10.412%

Question 1: What is the carrying value of the revised loan as of the date of modification?

Question 2: How much is the interest expense for 2021?

Question 3: Assuming instead of renegotiating, RCBCareful retired the bonds for P9,150,000 on December 31, 2020. How much was the total cash paid to the bondholder on this date?