On January 1, 2021, Nebraska Company issued a 3-year bond with face value of P1,500,000 and a 9% stated rate. The bonds mature on January 1, 2024 and interest is payable annually on December 31. The bonds are issued with an effective yield of 10%. The company also paid bond issue costs. Because of the bond issue costs, the adjusted effective rate is 11%. Assuming that the bonds was retired on June 30, 2023 at total payment of P1,520,000. How much is the gain on retirement of bonds? ? How much is the carrying value of the bonds in its December 31, 2022 statement of financial position?
On January 1, 2021, Nebraska Company issued a 3-year bond with face value of P1,500,000 and a 9% stated rate. The bonds mature on January 1, 2024 and interest is payable annually on December 31. The bonds are issued with an effective yield of 10%. The company also paid bond issue costs. Because of the bond issue costs, the adjusted effective rate is 11%. Assuming that the bonds was retired on June 30, 2023 at total payment of P1,520,000. How much is the gain on retirement of bonds? ? How much is the carrying value of the bonds in its December 31, 2022 statement of financial position?
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 6PA: Aggies Inc. issued bonds with a $500,000 face value, 10% interest rate, and a 4-year term on July 1,...
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On January 1, 2021, Nebraska Company issued a 3-year bond with face value of P1,500,000 and a 9% stated rate. The bonds mature on January 1, 2024 and interest is payable annually on December 31. The bonds are issued with an effective yield of 10%. The company also paid bond issue costs. Because of the bond issue costs, the adjusted effective rate is 11%.
- Assuming that the bonds was retired on June 30, 2023 at total payment of P1,520,000. How much is the gain on retirement of bonds? ?
- How much is the carrying
value of the bonds in its December 31, 2022statement of financial position ?
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