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On January 1, 2016, Gilberto Company purchased 9% bonds with a face amount of P4,000,000 for P3,756,000 to yield 10%. The bonds are dated January 1, 2016, mature on December 31, 2025 and pay interest annually on December 31. The interest method of amortizing bond discount is used. 1. What amount should be reported as interest revenue for 2016? a. 338,040 b. 360,000 c. 375,000 d. 400,000

On January 1, 2016, Gilberto Company purchased 9% bonds with a face amount of P4,000,000 for P3,756,000 to yield 10%. The bonds are dated January 1, 2016, mature on December 31, 2025 and pay interest annually on December 31. The interest method of amortizing bond discount is used. 1. What amount should be reported as interest revenue for 2016? a. 338,040 b. 360,000 c. 375,000 d. 400,000

FINANCIAL ACCOUNTING
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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On January 1, 2016, Gilberto Company purchased 9% bonds with a face amount of P4,000,000 for P3,756,000 to yield 10%. The bonds are dated January 1, 2016, mature on December 31, 2025 and pay interest annually on December 31. The interest method of amortizing bond discount is used. 1. What amount should be reported as interest revenue for 2016? a. 338,040 b. 360,000 c. 375,000 d. 400,000
Transcribed Image Text:On January 1, 2016, Gilberto Company purchased 9% bonds with a face amount of P4,000,000 for P3,756,000 to yield 10%. The bonds are dated January 1, 2016, mature on December 31, 2025 and pay interest annually on December 31. The interest method of amortizing bond discount is used. 1. What amount should be reported as interest revenue for 2016? a. 338,040 b. 360,000 c. 375,000 d. 400,000
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