Kevin Inc. issues P 10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are P 9,802,072. The company uses effective-interest method in amortization. For the year-ended 2020 financial statements, what amount should be reported as interest expense, and carrying amount of the bonds payable, respectively a. P 390,000 and P 10,000,000, respectively b. P 780,000 and P 9,812,562, respectively c. P 784,248 and P 9,806,320, respectively d. P 784,166 and P 9,804,154, respectively
Kevin Inc. issues P 10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are P 9,802,072. The company uses effective-interest method in amortization. For the year-ended 2020 financial statements, what amount should be reported as interest expense, and carrying amount of the bonds payable, respectively a. P 390,000 and P 10,000,000, respectively b. P 780,000 and P 9,812,562, respectively c. P 784,248 and P 9,806,320, respectively d. P 784,166 and P 9,804,154, respectively
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...
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Kevin Inc. issues P 10,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2020. Interest is paid on June 30 and December 31. The proceeds from the bonds are P 9,802,072. The company uses effective-interest method in amortization. For the year-ended 2020 financial statements, what amount should be reported as interest expense, and carrying amount of the bonds payable, respectively
a. P 390,000 and P 10,000,000, respectively
b. P 780,000 and P 9,812,562, respectively
c. P 784,248 and P 9,806,320, respectively
d. P 784,166 and P 9,804,154, respectively
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