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On January 1, 2018, the Blue Sapphire Corporation issued P 8,000,000 bonds. The bonds pay interest annually at 12% on the outstanding balance. The face value of the bonds is payable in installments of P 2,000,000 every December 31,starting December 31, 2018.The bonds were sold at a price that yields 8%. REQUIRED: Determine the following: (a) Determine the issue price of the bonds on January 1,2018. (b) Prepare an amortization table using the effective interest method. (c) Prepare entries in the books of Blue Sapphire Corporation for years 2018 through 2021 related to the bonds.

On January 1, 2018, the Blue Sapphire Corporation issued P 8,000,000 bonds. The bonds pay interest annually at 12% on the outstanding balance. The face value of the bonds is payable in installments of P 2,000,000 every December 31,starting December 31, 2018.The bonds were sold at a price that yields 8%. REQUIRED: Determine the following: (a) Determine the issue price of the bonds on January 1,2018. (b) Prepare an amortization table using the effective interest method. (c) Prepare entries in the books of Blue Sapphire Corporation for years 2018 through 2021 related to the bonds.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2018, the Blue Sapphire Corporation issued P 8,000,000 bonds. The bonds pay interest annually at

12% on the outstanding balance. The face value of the bonds is payable in installments of P 2,000,000 every

December 31,starting December 31, 2018.The bonds were sold at a price that yields 8%.

REQUIRED: Determine the following:

(a) Determine the issue price of the bonds on January 1,2018.

(b) Prepare an amortization table using the effective interest method.

(c) Prepare entries in the books of Blue Sapphire Corporation for years 2018 through 2021 related to the

bonds.

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