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

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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