On January 1, 2019, Tara Company issued a 10% bonds payable in the face amount of P6,000,000. The bonds mature on January 1, 2031. The bonds were issued to yield 12% . BB Company uses effective interest method of amortizing the bonds. Interest is payable semiannually on January 1 and July 1. 1. Compute for the issue price of the bonds on January 1, 2019. 2. On June 30, 2020, what amount should be reported as interest expense? 3. Compute for the carrying amount of the bonds as of December 31, 2020.
On January 1, 2019, Tara Company issued a 10% bonds payable in the face amount of P6,000,000. The bonds mature on January 1, 2031. The bonds were issued to yield 12% . BB Company uses effective interest method of amortizing the bonds. Interest is payable semiannually on January 1 and July 1.
1. Compute for the issue price of the bonds on January 1, 2019.
2. On June 30, 2020, what amount should be reported as interest expense?
3. Compute for the carrying amount of the bonds as of December 31, 2020.
4. Assuming that the bonds were retired at 120 on September 2, 2021, compute for the carrying amount of the bonds as of September 2, 2021.
5. Assuming that the bonds were retired at 120 on September 2, 2021, compute for the retirement price on September 2, 2021.
6. Assuming that the bonds were retired at 120 on September 2, 2021, compute for the gain or loss on retirement..
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