1.) On January 1, 2007, Red Velvet Co. issued its 10% bonds in the face amount of P3,000,000, which mature on January 1, 2017. The bonds were issued for P3,405,000 to yield 8%, resulting in bond premium of P405,000. Red Velvet uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2007, Red Velvet's adjusted unamortized bond premium should be?
1.) On January 1, 2007, Red Velvet Co. issued its 10% bonds in the face amount of P3,000,000, which mature on January 1, 2017. The bonds were issued for P3,405,000 to yield 8%, resulting in bond premium of P405,000. Red Velvet uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2007, Red Velvet's adjusted unamortized bond premium should be?
2.) On Feb, 5, 2017, an employee filed a P 2,000,000 lawsuit against Sans Co. for damages suffered when one of Sans' plant exploded on Dec, 29, 2016. The legal counsel believed the entity would probably lose the lawsuit and estimated the loss to be P 500,000. The employee offered to settle the lawsuit out of court for P 900,000 but the entity dis not agree to the settlement. On December 31, 2016, what amount should be reported as liability from lawsuit?
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