2. On January 1, 20x1, Faith Co. issued 1,000, P2,000, 12% bonds for P2,206,168. Principal is due on December 31, 20x3, while interest is due annually every year-end. Faith Co. incurred transaction costs of P106,694 on the issuance. The effective interest rates are 8% before adjustment for transaction costs and 10% after adjustment for transaction costs. Requirement: Provide the journal entries over the life of the bonds.

2. On January 1, 20x1, Faith Co. issued 1,000, P2,000, 12% bonds for P2,206,168. Principal is due on December 31, 20x3, while interest is due annually every year-end. Faith Co. incurred transaction costs of P106,694 on the issuance. The effective interest rates are 8% before adjustment for transaction costs and 10% after adjustment for transaction costs. Requirement: Provide the journal entries over the life of the bonds.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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