1. How much is the purchase price of the bonds?2. Assuming that the nominal interest is 11% and the bonds were acquired to yield 13%, how much is the purchase price of the bonds?3. Assume that the interest is payable every June 30 and December 31, how much is the purchase price of the bonds? On January 1, 2021, CCC Company acquired 13% bonds in the face amount of P1,300,000 to beappropriately classified as FA at amortized cost. The bonds mature on December 31, 2024. The bondswere required to yield 11%. Interest is payable every December 31.

Solution-1 Cash Flow at the time of maturity = P1300000 Interest (Annuity) annually = (P1300000…

On January 1, 2021, CCC Company acquired 13% bonds in the face amount of P1,300,000 to be appropriately classified as FA at amortized cost. The bonds mature on December 31, 2024. The bonds were required to yield 11%. Interest is payable every December 31.

On January 1, 2021, CCC Company acquired 13% bonds in the face amount of P1,300,000 to be appropriately classified as FA at amortized cost. The bonds mature on December 31, 2024. The bonds were required to yield 11%. Interest is payable every December 31.

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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