On December 31, 20x0, Raymond Inc., issued ₱200,000, 8% serial bonds, to be repaid in the amount of ₱40,000 each year. Interest is payable annually on December 31. The bonds were issued to yield 10% a year. The bond proceeds were ₱190,280 based on the present values at December 31,20x0, of the five annual payments as follows: Due date Amounts due Present value at 12/31/99 Principal Interest 12/31/x1 40,000 16,000 50,900 12/31/x2 40,000 12,800 43,610 12/31/x3 40,000 9,600 37,250 12/31/x4 40,000 6,400 31,690 12/31/x5 40,000 3,200 26,830 190,280 Raymond amortizes the bond discount by the effective interest method. In its December 31, 20x1, balance sheet at what amount should Raymond report the carrying value of the bonds?
On December 31, 20x0, Raymond Inc., issued ₱200,000, 8% serial bonds, to be repaid in the amount of ₱40,000 each year. Interest is payable annually on December 31. The bonds were issued to yield 10% a year. The bond proceeds were ₱190,280 based on the present values at December 31,20x0, of the five annual payments as follows: Due date Amounts due Present value at 12/31/99 Principal Interest 12/31/x1 40,000 16,000 50,900 12/31/x2 40,000 12,800 43,610 12/31/x3 40,000 9,600 37,250 12/31/x4 40,000 6,400 31,690 12/31/x5 40,000 3,200 26,830 190,280 Raymond amortizes the bond discount by the effective interest method. In its December 31, 20x1, balance sheet at what amount should Raymond report the carrying value of the bonds?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- On December 31, 20x0, Raymond Inc., issued ₱200,000, 8% serial bonds, to be repaid in the amount of ₱40,000 each year. Interest is payable annually on December 31. The bonds were issued to yield 10% a year. The bond proceeds were ₱190,280 based on the present values at December 31,20x0, of the five annual payments as follows:
|
Due date |
Amounts due |
Present value at 12/31/99 |
|
|
Principal |
Interest |
||
|
12/31/x1 |
40,000 |
16,000 |
50,900 |
|
12/31/x2 |
40,000 |
12,800 |
43,610 |
|
12/31/x3 |
40,000 |
9,600 |
37,250 |
|
12/31/x4 |
40,000 |
6,400 |
31,690 |
|
12/31/x5 |
40,000 |
3,200 |
26,830 |
|
|
|
|
190,280 |
Raymond amortizes the bond discount by the effective interest method. In its December 31, 20x1,
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