In the course of analyzing the liabilities section of ABC Compnay, you found that the entity on January 2, 2017 issued at a premium bonds payable with a face value of P500,000. The premium was erroneously credited by the company to Interest Income. The bonds are payable on December 31, 2024 and pay interest semiannually on June 30 and December 31. You instructed your staff to compute the premium amortization using the interest method and he provided you with the following: Premium amortization from January 2, 2017 to June 30, 2017 Bond carrying value as of June 30, 2017 Total interest paid on bonds for the year 2017 (payments made on June 30 and December 31) 15. The annual effective interest rate on the bonds is a. 10% b. 11% c. 12% P1,562 555,738 70,000
In the course of analyzing the liabilities section of ABC Compnay, you found that the entity on January 2, 2017 issued at a premium bonds payable with a face value of P500,000. The premium was erroneously credited by the company to Interest Income. The bonds are payable on December 31, 2024 and pay interest semiannually on June 30 and December 31. You instructed your staff to compute the premium amortization using the interest method and he provided you with the following: Premium amortization from January 2, 2017 to June 30, 2017 Bond carrying value as of June 30, 2017 Total interest paid on bonds for the year 2017 (payments made on June 30 and December 31) 15. The annual effective interest rate on the bonds is a. 10% b. 11% c. 12% P1,562 555,738 70,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 9RE
Related questions
Question
![16. The premium amortization on the bonds payable for 2017 is
a. P3,124
b. 3.218
c. 5,574
d. 8,022
e. None of these
Answer
(letter only)
17. Interest expense on the bonds for 2017 is
A. 61, 978
b. 66,782
c. 66,876
d. 70,000
e. None of these
Answer:
(letter only)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6daa4f2d-2bf4-48b4-89a3-6b92b88129c6%2F0ff3dbf5-97e0-412c-889b-158f329c58b9%2F47lf84a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:16. The premium amortization on the bonds payable for 2017 is
a. P3,124
b. 3.218
c. 5,574
d. 8,022
e. None of these
Answer
(letter only)
17. Interest expense on the bonds for 2017 is
A. 61, 978
b. 66,782
c. 66,876
d. 70,000
e. None of these
Answer:
(letter only)
![In the course of analyzing the liabilities section of ABC Compnay, you found that the entity on January 2, 2017 issued at a premium bonds payable
with a face value of P500,000. The premium was erroneously credited by the company to Interest Income. The bonds are payable on December 31,
2024 and pay interest semiannually on June 30 and December 31. You instructed your staff to compute the premium amortization using the interest
method and he provided you with the following:
Premium amortization from January 2, 2017 to June 30, 2017
P1,562
Bond carrying value as of June 30, 2017
555,738
Total interest paid on bonds for the year 2017
(payments made on June 30 and December 31)
70,000
15. The annual effective interest rate on the bonds is
a. 10%
b. 11%
c. 12%
d. 14%
e. None of these](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F6daa4f2d-2bf4-48b4-89a3-6b92b88129c6%2F0ff3dbf5-97e0-412c-889b-158f329c58b9%2Fm3nnejvo_processed.jpeg&w=3840&q=75)
Transcribed Image Text:In the course of analyzing the liabilities section of ABC Compnay, you found that the entity on January 2, 2017 issued at a premium bonds payable
with a face value of P500,000. The premium was erroneously credited by the company to Interest Income. The bonds are payable on December 31,
2024 and pay interest semiannually on June 30 and December 31. You instructed your staff to compute the premium amortization using the interest
method and he provided you with the following:
Premium amortization from January 2, 2017 to June 30, 2017
P1,562
Bond carrying value as of June 30, 2017
555,738
Total interest paid on bonds for the year 2017
(payments made on June 30 and December 31)
70,000
15. The annual effective interest rate on the bonds is
a. 10%
b. 11%
c. 12%
d. 14%
e. None of these
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