On October 1, 2020, Complex Company purchased a 12% P3,000,000 face amount bond issue for P2,700,000 excluding accrued interest to be held as financial asset at amortized cost. The date of the bonds is February 1, 2020 and the interest is payable semiannually on February 1 and August 1. The bonds mature annually at the rate of P1,000,000 on February 1, 2020 and every February 1 thereafter. Required: a. Prepare a schedule of amortization following the bond outstanding method. D. Prepare journal entries for 2020 and 2021.

On October 1, 2020, Complex Company purchased a 12% P3,000,000 face amount bond issue for P2,700,000 excluding accrued interest to be held as financial asset at amortized cost. The date of the bonds is February 1, 2020 and the interest is payable semiannually on February 1 and August 1. The bonds mature annually at the rate of P1,000,000 on February 1, 2020 and every February 1 thereafter. Required: a. Prepare a schedule of amortization following the bond outstanding method. D. Prepare journal entries for 2020 and 2021.

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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Question

100%

On October 1, 2020, Complex Company purchased a 12%
P3,000,000 face amount bond issue for P2,700,000 excluding
accrued interest to be held as financial asset at amortized
cost.
The date of the bonds is February 1, 2020 and the interest is
payable semiannually on February 1 and August 1.
The bonds mature annually at the rate of P1,000,000 on
February 1, 2020 and every February 1 thereafter.
Required:
a. Prepare a schedule of amortization following the bond
outstanding method.
D. Prepare journal entries for 2020 and 2021.

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