On July 1, 2019, Honda Company issued 5,000 of the P1,000 face value, 8% bonds for P4,615,000 to yield 10% market rate. The bonds, which mature on July 1, 2024, pay interest semi-annually on January 1 and July 1. Honda uses the effective interest method of amortization and the bonds are appropriately recorded as long-term liability. The bonds should be reported on the December 31, 2019 balance sheet at: a. P4,676,500 c. P4,645,750 b. P4,584,250 d. P4,653,500
On July 1, 2019, Honda Company issued 5,000 of the P1,000 face value, 8% bonds for P4,615,000 to yield 10% market rate. The bonds, which mature on July 1, 2024, pay interest semi-annually on January 1 and July 1. Honda uses the effective interest method of amortization and the bonds are appropriately recorded as long-term liability. The bonds should be reported on the December 31, 2019 balance sheet at: a. P4,676,500 c. P4,645,750 b. P4,584,250 d. P4,653,500
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On July 1, 2019, Honda Company issued 5,000 of the P1,000 face
bonds, which mature on July 1, 2024, pay interest semi-annually on January 1 and July 1. Honda uses the effective interest method
of amortization and the bonds are appropriately recorded as long-term liability. The bonds should be reported on the December 31,
2019
a. P4,676,500 c. P4,645,750
b. P4,584,250 d. P4,653,500
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