On January 1, 2021, Toit Company issued a 10-year 9% bonds payable of P10,000,000 for a market rate of 8.5%. The company incurred 642,007.30 in bond issue costs. The amortization of bond discount was recorded using the effective interest method. Interest will be paid every January 1 of each year. a. What is the total net proceeds from the issuance of the bond? What is the effective interest rate used? ( b. c. How much was interest expense for 2021? d. How much interest was paid for the year 2025? e. What is the balance of Unamortized Discount/Premium as of December 31, 2023? Indicate if premium/discount.

On January 1, 2021, Toit Company issued a 10-year 9% bonds payable of P10,000,000 for a market rate of 8.5%. The company incurred 642,007.30 in bond issue costs. The amortization of bond discount was recorded using the effective interest method. Interest will be paid every January 1 of each year. a. What is the total net proceeds from the issuance of the bond? What is the effective interest rate used? ( b. c. How much was interest expense for 2021? d. How much interest was paid for the year 2025? e. What is the balance of Unamortized Discount/Premium as of December 31, 2023? Indicate if premium/discount.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...

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