Problem No. 3 On July 1, 2014, LINE Inc. issued a 4-year, P1,000,000 bonds payable dated January 1, 2014, with 10% interest. The principal will be due at the end of the term and the interest is payable annually every December 31. The effective interest rate of the bonds is 12%. Half of the bonds were retired on July 1, 2016 at 110. 5. What is the cash rocoivod by LINE Inc. on July 1, 2014 from the issuanco of bonds payable? 6. What is the intorost exponso for the year onded December 31, 2014? 7. What is the gain/(loss) on rotiromont of bonds payablo?

Problem No. 3 On July 1, 2014, LINE Inc. issued a 4-year, P1,000,000 bonds payable dated January 1, 2014, with 10% interest. The principal will be due at the end of the term and the interest is payable annually every December 31. The effective interest rate of the bonds is 12%. Half of the bonds were retired on July 1, 2016 at 110. 5. What is the cash rocoivod by LINE Inc. on July 1, 2014 from the issuanco of bonds payable? 6. What is the intorost exponso for the year onded December 31, 2014? 7. What is the gain/(loss) on rotiromont of bonds payablo?

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

Problem No. 3
On July 1, 2014, LINE Inc. issued a 4-year, P1,000,000 bonds payable dated January 1, 2014, with 10% interest. The principal will be
due at the end of the term and the interest is payable annually every December 31. The effective interest rate of the bonds is 12%. Half
of the bonds were retired on July 1, 2016 at 110.
5. What is the cash recoived by LINE Inc. on July 1, 2014 from the issuance of bonds payable?
6. What is the intorost oxponso for the yoar onded Docombor 31, 2014?
7. What is tho gain/(loss) on rotiromont of bonds payablo?

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