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a. What is the discount or premium from the issuance of the bonds payable? Indicate whether discount/premium.

a. What is the discount or premium from the issuance of the bonds payable? Indicate whether discount/premium.

FINANCIAL ACCOUNTING
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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3. Terry Company is authorized to issue P5,000,000 of 6%, 10- year bonds dated July 1, 2011 with interest payments on June 30 and December 31. When bonds are issued on November 1, 2011, Terry Company received cash of P5,150,000 (excluding interest). a. What is the discount or premium from the issuance of the bonds payable? Indicate whether discount/premium. b. How much is the total interest expense for the whole life of the bond?
Transcribed Image Text:3. Terry Company is authorized to issue P5,000,000 of 6%, 10- year bonds dated July 1, 2011 with interest payments on June 30 and December 31. When bonds are issued on November 1, 2011, Terry Company received cash of P5,150,000 (excluding interest). a. What is the discount or premium from the issuance of the bonds payable? Indicate whether discount/premium. b. How much is the total interest expense for the whole life of the bond?
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