On January 1, 2021, Solis Co. issued its 10% bonds in the face amount of P3,000,000, which mature on January 1, 2026. The bonds were issued for P3,405,000 to yield 8%, resulting in bond premium of P405,000. Solis uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2021, the carrying value of the bonds should be a.) P3,405,000 b.) P3,377,400 c.) P3,364,500 d.) P3,304,500
On January 1, 2021, Solis Co. issued its 10% bonds in the face amount of P3,000,000, which mature on January 1, 2026. The bonds were issued for P3,405,000 to yield 8%, resulting in bond premium of P405,000. Solis uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2021, the carrying value of the bonds should be a.) P3,405,000 b.) P3,377,400 c.) P3,364,500 d.) P3,304,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2021, Solis Co. issued its 10% bonds in the face amount of P3,000,000, which mature on January 1, 2026. The bonds were issued for P3,405,000 to yield 8%, resulting in bond premium of P405,000. Solis uses the effective-interest method of amortizing bond premium. Interest is payable annually on December 31. At December 31, 2021, the carrying
a.) P3,405,000
b.) P3,377,400
c.) P3,364,500
d.) P3,304,500
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