On January 1, 2019, Langka Inc. issued 9% bonds in the face amount of P5,000,000 which mature on January 1, 2019. The bonds were issued for P4,695,000 to yield 10%. Interest is payable annually on December 31. The entity used the interest method of amortizing bond discount. 1. How much was paid to the bondholders as interest on December 31, 2019? 2. How much was the amortization of the discount on bonds payable for 2019?
On January 1, 2019, Langka Inc. issued 9% bonds in the face amount of P5,000,000 which mature on January 1, 2019. The bonds were issued for P4,695,000 to yield 10%. Interest is payable annually on December 31. The entity used the interest method of amortizing bond discount. 1. How much was paid to the bondholders as interest on December 31, 2019? 2. How much was the amortization of the discount on bonds payable for 2019?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2019, Langka Inc. issued 9% bonds in the face amount of P5,000,000 which mature on January 1, 2019. The bonds were issued for P4,695,000 to yield 10%. Interest is payable annually on December 31. The entity used the interest method of amortizing bond discount.
1. How much was paid to the bondholders as interest on December 31, 2019?
2. How much was the amortization of the discount on bonds payable for 2019?
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