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Use the following information to answer the next three questions: On January 1, 2018, KC Company issued 5-year bonds with face amount of P5,000,000 at
Use the following information to answer the next three questions: On January 1, 2018, KC Company issued 5-year bonds with face amount of P5,000,000 at 110. The entity paid bond issue cost of P80,000 on the same date. The stated interest rate on the bonds is 8% payable annually every December 31. The bonds are issued to yield 6% per annum. 4. What is the initial measurement of bonds on January 1, 2018? A. 5,000,000 B. 4,920,000 C. 5,420,000 D. 5,500,000 5. What is the interest expense for the year 2018? A. 300,000 B. 325,200 C. 330,000 D. 400,000 6. What is the carrying amount of the bonds on December 31, 2018? A. 5,000,000 B. 5,345,200 C. 5,430,000 D. 5,500,000
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