On January 1, 20x1, Kageyama Corporation issues P1,500,000 of 10% bonds at 97 due December 31, 2x10. Legal and other costs of P24,000 were incurred in connection with the issue. Interest on the bonds is payable annually each December 31. The P24,000 issue costs are being deferred and amortized on a straight-line basis over the 10-year term of the bonds. The discount on the bonds is also being amortized on a straight-line basis over 10 years. The bonds are callable at 10, and on January 2, 20x6, Kageyama called P900,000 face amount of the bonds and retired them. REQUIRED: 1. Unamortized discount on January 2, 20x6 2. Unamortized bond issue costs on January 2, 20x6

On January 1, 20x1, Kageyama Corporation issues P1,500,000 of 10% bonds at 97 due December 31, 2x10. Legal and other costs of P24,000 were incurred in connection with the issue. Interest on the bonds is payable annually each December 31. The P24,000 issue costs are being deferred and amortized on a straight-line basis over the 10-year term of the bonds. The discount on the bonds is also being amortized on a straight-line basis over 10 years. The bonds are callable at 10, and on January 2, 20x6, Kageyama called P900,000 face amount of the bonds and retired them. REQUIRED: 1. Unamortized discount on January 2, 20x6 2. Unamortized bond issue costs on January 2, 20x6

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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