Problem 2:On January 1, 2021, PRANCER Company was authorized to issue 12% bonds with a face amount ofP5,000,000. Interest on bonds is payable semiannually on January 1 and July. Bonds mature onJanuary 1, 2026. The entire issue was sold on February 28, 2021 at 96 including interest. Bond issuecost amounts to P180,000. On October 1, 2023, bonds of P2,000,000 face amount were retired at 98plus accrued interest.Requirements:C. Prepare all necessary entries for calendar years 2021 and 2023 only.D. Compute or provide the answers for the following:Z. How much cash was received on February 28, 2021?8. How much discount or premium was initially recognized? (In the google form, if discount,put a negative sign before the numerical figure.)9. How much is the interest expense for the year ended December 31, 2021?10. How much is the carrying value of the bond on December 31, 2021?11. How much cash was paid on October 1, 2023?12. How much is the gain or loss on retirement of bonds to be recognized on October 1, 2023?13. How much is the remaining carrying value of the bonds on December 31, 2023?

Bond is a source of debt financing for companies. It carries a fixed rate of interest which the…

Answered: On January 1, 2021, PRANCER Company was…

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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Coronado Inc. issued $920,000 of 10%, 10-year bonds on June 30, 2025, for $814,472. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Coronado uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2025. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded
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