ACE Company issued 4,000, P1,000 11% bonds maturing after 10 years on January 4, 2020. The Bonds pay interest semiannually on June 30 and December 31. If the current market rate of interest is 12%. 1. What is the initial carrying amount of the bonds on January 4? 2. What is the carrying amount of the bonds on December 31, 2022? 3. Prepare all the necessary journal entries for the year 2020, 2021 and 2022.

ACE Company issued 4,000, P1,000 11% bonds maturing after 10 years on January 4, 2020. The Bonds pay interest semiannually on June 30 and December 31. If the current market rate of interest is 12%. 1. What is the initial carrying amount of the bonds on January 4? 2. What is the carrying amount of the bonds on December 31, 2022? 3. Prepare all the necessary journal entries for the year 2020, 2021 and 2022.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EB: Chung Inc. issued $50,000 of 3-year bonds on January 1, 2018, with a stated rate of 4% and a market...

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