On September 31, 2021, an entity issues bonds with face amount of P8,000,000 for P9,105, 022 including accrued interest. The bonds are dated January 1, 2021 and pay annual interest of 11% every December 31. The effective interest rate is 9%.
On September 31, 2021, an entity issues bonds with face amount of P8,000,000 for P9,105, 022 including accrued interest. The bonds are dated January 1, 2021 and pay annual interest of 11% every December 31. The effective interest rate is 9%.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On September 31, 2021, an entity issues bonds with face amount of P8,000,000 for
P9,105, 022 including accrued interest. The bonds are dated January 1, 2021 and pay
annual interest of 11% every December 31. The effective interest rate is 9%.
Requirement:
a. Compute for the initial carrying amount of the bonds.
b. Provide the entry on September 1, 2021 to record the issuance of the bonds.
c. Compute for the interest expense in 2021.
![3. On September 31, 2021, an entity issues bonds with face amount of P8,000,000 for
P9,105, 022 including accrued interest. The bonds are dated January 1, 2021 and pay
annual interest of 11% every December 31. The effective interest rate is 9%.
Requirement:
a. Compute for the initial carrying amount of the bonds.
b. Provide the entry on September 1, 2021 to record the issuance of the bonds.
c. Compute for the interest expense in 2021.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fecddb6b3-8c39-4228-b7d3-38c9044dd5ef%2Fee8da8e0-6ca0-403d-8bcf-66da19b7d994%2F744ugg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3. On September 31, 2021, an entity issues bonds with face amount of P8,000,000 for
P9,105, 022 including accrued interest. The bonds are dated January 1, 2021 and pay
annual interest of 11% every December 31. The effective interest rate is 9%.
Requirement:
a. Compute for the initial carrying amount of the bonds.
b. Provide the entry on September 1, 2021 to record the issuance of the bonds.
c. Compute for the interest expense in 2021.
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