P642,007.30 in b

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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On January 1, 2021, Tango Company issued a 10-year 9% bonds payable of P10,000,000 for a market rate of 8.5%. The company incurred P642,007.30 in bond issue costs. The amortization of bond discount was recorded using the effective interest method. Interest will be paid every January 1 of each year.

1. What is the total net proceeds from the issuance of the bond?

2. What is the effective interest rate used?

3. How much was the interest expense for 2021?

4. What is the balance of unamortized discount/premium as of December 31, 2023? ( Premium/discount)

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