On April 1, 2XX6, a company bought a 10-year, 8% P 400,000 bonds for P 350,000, a price which will yield a 10% effective rate/year. The bonds, which mature on April 1, 2X16, pay interest semiannually on April 1 and October 1. On October 1, 2XX6 and using the effective interest method, bond discount amortization of P 1,500 was recorded in addition to revenue of O P 17,500 OP 14,500 OP 16,000 O P 14,000
On April 1, 2XX6, a company bought a 10-year, 8% P 400,000 bonds for P 350,000, a price which will yield a 10% effective rate/year. The bonds, which mature on April 1, 2X16, pay interest semiannually on April 1 and October 1. On October 1, 2XX6 and using the effective interest method, bond discount amortization of P 1,500 was recorded in addition to revenue of O P 17,500 OP 14,500 OP 16,000 O P 14,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![On April 1, 2XX6, a company bought a
10-year, 8% P 400,000 bonds for P
350,000, a price which will yield a 10%
effective rate/year. The bonds, which
mature on April 1, 2X16, pay interest
semiannually on April 1 and October 1.
On October 1, 2XX6 and using the
effective interest method, bond discount
amortization of P 1,500 was recorded in
addition to revenue of
O P 17,500
OP 14,500
OP 16,000
O P 14,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F76f82bca-2e06-4b52-871e-030d9772d229%2F2f170ebd-2bfc-48da-ba20-f51935800223%2Fe2u4ut_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On April 1, 2XX6, a company bought a
10-year, 8% P 400,000 bonds for P
350,000, a price which will yield a 10%
effective rate/year. The bonds, which
mature on April 1, 2X16, pay interest
semiannually on April 1 and October 1.
On October 1, 2XX6 and using the
effective interest method, bond discount
amortization of P 1,500 was recorded in
addition to revenue of
O P 17,500
OP 14,500
OP 16,000
O P 14,000
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