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On July 1, 2019, Fewa Company issued P4,000,000 of 16% bonds to yield 14%. Interest is payable semi-annually on January 1 and July 1. The bonds mature in five years. Fewa Company uses the calendar year and the effective interest method of amortization. (Use 5 decimal places for PV factor). 1. How much was the issue price of the bond? A. 4,280,949 B. 4,274,651 C. 3,791,051 D. 4,000,000 2. What is the bond Interest Expense for the year 2020? A. 299,666 B. 599,333 C. 594,963 D. 640,000 3. What is the bond carrying value at December 31, 2020? A. 4,215,578 B. 4,000,000 C. 4,238,858 D. 4,315,318

On July 1, 2019, Fewa Company issued P4,000,000 of 16% bonds to yield 14%. Interest is payable semi-annually on January 1 and July 1. The bonds mature in five years. Fewa Company uses the calendar year and the effective interest method of amortization. (Use 5 decimal places for PV factor). 1. How much was the issue price of the bond? A. 4,280,949 B. 4,274,651 C. 3,791,051 D. 4,000,000 2. What is the bond Interest Expense for the year 2020? A. 299,666 B. 599,333 C. 594,963 D. 640,000 3. What is the bond carrying value at December 31, 2020? A. 4,215,578 B. 4,000,000 C. 4,238,858 D. 4,315,318

FINANCIAL ACCOUNTING
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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On July 1, 2019, Fewa Company issued P4,000,000 of 16% bonds to yield 14%. Interest is payable semi-annually on January 1 and July 1. The bonds mature in five years. Fewa Company uses the calendar year and the effective interest method of amortization. (Use 5 decimal places for PV factor).

1. How much was the issue price of the bond?

A. 4,280,949

B. 4,274,651

C. 3,791,051

D. 4,000,000

2. What is the bond Interest Expense for the year 2020?

A. 299,666

B. 599,333

C. 594,963

D. 640,000

3. What is the bond carrying value at December 31, 2020?

A. 4,215,578

B. 4,000,000

C. 4,238,858

D. 4,315,318

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