On July 1, 2002, Roger Co. paid P1,198,000 for 10% 20-year bonds with a face amount of P1,000,000. Interest is paid on December 31 and June 30. The bonds were purchased to yield 8%. Roger uses the effective interest method to recognize interest income from investment. What should be reported as carrying amount of the bonds in Roger’s December 31, 2002 balance sheet? P1,207,000 P1,198,000 P1,195,920 P1,193,050
On July 1, 2002, Roger Co. paid P1,198,000 for 10% 20-year bonds with a face amount of P1,000,000. Interest is paid on December 31 and June 30. The bonds were purchased to yield 8%. Roger uses the effective interest method to recognize interest income from investment. What should be reported as carrying amount of the bonds in Roger’s December 31, 2002 balance sheet? P1,207,000 P1,198,000 P1,195,920 P1,193,050
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 7MCQ
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On July 1, 2002, Roger Co. paid P1,198,000 for 10% 20-year bonds with a face amount of P1,000,000. Interest is paid on December 31 and June 30. The bonds were purchased to yield 8%. Roger uses the effective interest method to recognize interest income from investment. What should be reported as carrying amount of the bonds in Roger’s December 31, 2002 balance sheet?
P1,207,000
P1,198,000
P1,195,920
P1,193,050
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