Situation 1- an entity issued 6,000,000 of 9% ten years bonds on june 30,2019 for 5,625,000. This price provided a 10% yield on the bonds. Interest is payable semiannually ever june 30 and december 31
Situation 1- an entity issued 6,000,000 of 9% ten years bonds on june 30,2019 for 5,625,000. This price provided a 10% yield on the bonds. Interest is payable semiannually ever june 30 and december 31
Situation 2- an entity provided warranty for all products sold during 2019. The entuty sold 200,000 units during the current year. It estimated that 75% of the products sold will have no defects, 15% of the products sold will have a minor defects is P100 per unit whilw the ocst of the major defect is P300. The entity is also involvd in a tax dispute with the BIR in 2019. Based on legal advice, there is a 40% chance that the entity will lose the case and that entity will have to pay P500,000
What is the carrying amount of the bonds on December 31, 2019
- 5,647,500
- 5,636,250
- 5,613,750
- 6,000,000
What total amount of provisions should be recorded on December 31, 2019
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