Answered: P5,200,000. The best explanation for…

P5,200,000. The best explanation for the excess amount received over face value is that * a. the bonds were sold at a premium.

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

ilT GLOBE
7:38
31 of 37
15. Bonds with a face value of
P5.0 million, carrying a stated
interest rate of 12%; payable
semiannually on March 1 and
September 1, were issued on
July 1. The total proceeds from
the issue amounted to
P5,200,000. The best
explanation for the excess
amount received over face
value is that *
a. the bonds were sold at a
premium.
b. the bonds were sold at a higher
effective interest rate.
c. the bonds were issued at face
value plus accrued interest.
d. no explanation is possible without
knowing the maturity date of the
bond issue.
0

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