On December 31, 2019, the liability section of Antonio Company's statement of financial position included bonds payable of P10 million and unamortized premium on bonds payable of P180,000. Further verification revealed that these bonds were issued on December 31, 2017 and will become due on December 31, 2027. Interest at 12% is payable every June 30 and December 31. On April 1, 2020, Antonio Company retired P4,000,000 of these bonds at 97 plus accrued interest. The following are the questions: 1. How much was the total amount of cash paid for the retirement of bonds on April 1, 2020? 2. What is the carrying value of the bond as of December 31, 2019?
On December 31, 2019, the liability section of Antonio Company's statement of financial position included bonds payable of P10 million and unamortized premium on bonds payable of P180,000. Further verification revealed that these bonds were issued on December 31, 2017 and will become due on December 31, 2027. Interest at 12% is payable every June 30 and December 31. On April 1, 2020, Antonio Company retired P4,000,000 of these bonds at 97 plus accrued interest. The following are the questions: 1. How much was the total amount of cash paid for the retirement of bonds on April 1, 2020? 2. What is the carrying value of the bond as of December 31, 2019?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On December 31, 2019, the liability section of Antonio Company's statement of financial
position included bonds payable of P10 million and unamortized premium on bonds payable of P180,000. Further verification revealed that these bonds were issued on December 31, 2017 and will become due on December 31, 2027.
Interest at 12% is payable every June 30 and December 31.
On April 1, 2020, Antonio Company retired P4,000,000 of these bonds at 97 plus accrued interest.
The following are the questions:
1. How much was the total amount of cash paid for the retirement of bonds on April
1, 2020?
2. What is the carrying value of the bond as of December 31, 2019?
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