On January 1, 2019, Toni Corporation issued 3,000 of its 9%, P1,000 bonds when the prevailing market rate of interest was 8%. Interest is payable annually every January 1. The bonds mature on January 1, 2024. Toni paid a transaction cost of P24,460 in relation to the issuance of bonds and in effect the yield rate is 8.2%. Toni uses the effective method of amortization. Present value of 1 at 8.2% for 3 periods .78944 Present value of 1 at 8% for 3 periods .79383 Present value of annuity at 8.2% for 3 periods 2.56782 Present value of annuity at 8% for 3 periods 2.57710 38. On December 31, 2020 statement of financial position, how much would be shown as the carrying amount of the bonds payable? a. P3,022,181 b. P3,042,681 c. P3,061,631 d. P3,077,314 39. What is the balance of unamortized transaction cost or bond issue cost as of December 31, 2020? a. P5,598 b. P10,818 c. P15,676 d. P20,226
On January 1, 2019, Toni Corporation issued 3,000 of its 9%, P1,000 bonds when the prevailing market rate of interest was 8%. Interest is payable annually every January 1. The bonds mature on January 1, 2024. Toni paid a transaction cost of P24,460 in relation to the issuance of bonds and in effect the yield rate is 8.2%. Toni uses the effective method of amortization. Present value of 1 at 8.2% for 3 periods .78944 Present value of 1 at 8% for 3 periods .79383 Present value of annuity at 8.2% for 3 periods 2.56782 Present value of annuity at 8% for 3 periods 2.57710 38. On December 31, 2020 statement of financial position, how much would be shown as the carrying amount of the bonds payable? a. P3,022,181 b. P3,042,681 c. P3,061,631 d. P3,077,314 39. What is the balance of unamortized transaction cost or bond issue cost as of December 31, 2020? a. P5,598 b. P10,818 c. P15,676 d. P20,226
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 7C
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT