At year-end, Roth Company issued a P1,000,000 face value note payable to Wake Company in exchange for services rendered to Roth. The note, made at usual trade terms, is due in nine months and bears interest, payable at maturity, at the annual rate of 3%. The market interest rate is 8%. The compound interest factor of 1 due in nine months at 8% is 0.944. At what amount should the note payable be reported at year-end?
1. At year-end, Roth Company issued a P1,000,000 face value note payable to Wake Company in exchange for services rendered to Roth. The note, made at usual trade terms, is due in nine months and bears interest, payable at maturity, at the annual rate of 3%. The market interest rate is 8%. The compound interest factor of 1 due in nine months at 8% is 0.944. At what amount should the note payable be reported at year-end?
2. On March 1, 2021, Cain Company issued at 103 plus accrued interest 4,000 bonds of 9%, P1,000 face amount. The bonds are dated January 1, 2021 and mature on January 1, 2031. Interest is payable semiannually on January 1 and July 1. The entity paid bond issue cost of P200,000. What is the net cash received from the bond issuance?
3. On January 1, 2021, Luyang Company issued 3-year bonds with face amount of P5,000,000 at 98. Additionally, the entity paid bond issue cost of P140,000. The nominal rate is 10% and the effective rate is 12%after considering the bond issue cost. The interest is payable annually on December 31. The entity used the effective interest method in amortizing bond discount and issue cost. What is the carrying amount of the bonds payable on December 31, 2021?
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