This problem has 4 questions. On December 1, 2018, AAA Corporation issued a five-year, non-convertible P5,000,000 face value 12% bonds for P5,386,072, a price that yields 10%. Interest is payable semiannually on June 1 and December 1. On August 1, 2021, AAA Corporation retired P3,000,000 of the bonds at 105 plus accrued interest. The accounting period for the AAA corporation is the calendar year. The following are the 4 questions: What is the carrying value of the bonds on December 31, 2019? What is the carrying value of the bonds retired? What is balance of unamortized premium on bonds payable on the P3,000,000 face value bonds retired? How much is the total cash received on the retirement of the P3,000,000 face value bonds retired? What is the carrying value of the bonds retired?

This problem has 4 questions. On December 1, 2018, AAA Corporation issued a five-year, non-convertible P5,000,000 face value 12% bonds for P5,386,072, a price that yields 10%. Interest is payable semiannually on June 1 and December 1. On August 1, 2021, AAA Corporation retired P3,000,000 of the bonds at 105 plus accrued interest. The accounting period for the AAA corporation is the calendar year. The following are the 4 questions: What is the carrying value of the bonds on December 31, 2019? What is the carrying value of the bonds retired? What is balance of unamortized premium on bonds payable on the P3,000,000 face value bonds retired? How much is the total cash received on the retirement of the P3,000,000 face value bonds retired? What is the carrying value of the bonds retired?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

On January 2, 2015, Blossom Corporation issued $1,600,000 of 10% bonds at 99 due December 31, 2024. Interest on the bonds is payable annually each December 31. The discount on the bonds is also being amortized on a straight-line basis over the 10 years. (Straight-line is not materially different in effect from the preferable "interest method.") The bonds are callable at 102 (i.e., at 102% of face amount), and on January 2, 2020, Blossom called $960,000 face amount of the bonds and redeemed them. Ignoring income taxes, compute the amount of loss, if any, to be recognized by Blossom as a result of retiring the $960,000 of bonds in 2020. (Round answer to 0 decimal places, e.g. 38,548.) Loss on redemption $ Prepare the journal entry to record the redemption. (Round answers to 0 decimal places, e.g. 38,548. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent…
On July 1, 2021, Spear Co. issued 1,000 of its 10%, P1,000 bonds at 99 plus accrued interest. The bonds are dated April 1, 2015 and mature on April 1, 2031. Interest is payable semiannually on April 1 and October 1. What amount did Spear receive from the bond issuance? a.) P1,015,000 b.) P1,000,000 c.) P990,000 d.) P965,000
On January 1, 2022, Huff Co. sold P1,000,000 of its 10% bonds for P885,296 to yield 12%. Interest is payable semiannually on January 1 and July 1. What amount should Huff report as interest expense for the six months ended June 30, 2022? a.) P44,266 b.) P50,000 c.) P53,118 d.) P60,000
On January 1, 2021, Minorka Company issued a 5-year, P3,000,000, 17% bonds. The effective interest rate after considering the bond issue cost is 16%. The bond issue cost paid by the issuer is P70,000 The bond pays interest annually every December 31. The entity uses 2 decimal places for the PV factor. Under the effective interest method, how much is the issue price of the bonds payable on January 1, 2021?
Madison Corporation is authorized to issue $600,000 of 7-year bonds dated June 30, 2019, with a stated rate of interest of 11%. Interest on the bonds is payable semiannually, and the bonds are sold on June 30, 2019. Required: Determine the proceeds that the company will receive if it sells the following: (Click here to access the tables to use with this exercise and round your answers to two decimal places, if necessary.) 1. The bonds to yield 12% 2. The bonds to yield 10%
On January 1, 2019, Toni Corporation issued 3,000 of its 9%, P1,000 bonds when the prevailing market rate of interest was 8%. Interest is payable annually every January 1. The bonds mature on January 1, 2024. Toni paid a transaction cost of P24,460 in relation to the issuance of bonds and in effect the yield rate is 8.2%. Toni uses the effective method of amortization. Present value of 1 at 8.2% for 3 periods .78944 .79383 Present value of 1 at 8% for 3 periods Present value of annuity at 8.2% for 3 periods 2.56782 Present value of annuity at 8% for 3 periods 2.57710 38. On December 31, 2020 statement of financial position, how much would be shown as the carrying amount of the bonds payable? a. P3,022,181 b. P3,042,681 c. P3,061,631 d. P3,077,314 39. What is the balance of unamortized transaction cost or bond issue cost as of December 31, 2020? a. P5,598 b. P10,818 c. P15,676 d. P20,226
How much is the total interest revenue that should be recognized for the year ended December 31, 2020?
Please urgently please without plagiarism
Presented below are two independent situations. (a) Oriole Co. sold $1,840,000 of 12%, 10-year bonds at 105 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Oriole uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $ (b) Waterway Inc. issued $540,000 of 9%, 10-year bonds on June 30, 2020, for $447,091. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Waterway uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to 0 decimal places, e.g. 38,548.) Interest expense to be recorded $
On January 1, 2020, Naples Co. issued $280,000 of 10-year bonds at 96. The bonds pay 6% cash interest annually on December 31. The company retired 30% of the bonds on June 1, 2020, when the bonds were selling at 90 plus accrued interest. Assume the straight-line interest method is used to amortize the bond discount. What is the gain recognized on the redemption of the bonds? Select one: a. $5,208 gain b. $8,400 gain c. $5,040 gain d. $5,180 gain
Presented below are two independent situations. (a) Pharoah Co. sold $1,890,000 of 12%, 10-year bonds at 105 on January 1, 2020. The bonds were dated January 1, 2020, and pay interest on July 1 and January 1. If Pharoah uses the straight-line method to amortize bond premium or discount, determine the amount of interest expense to be reported on July 1, 2020, and December 31, 2020. (Round answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $ (b) Novak Inc. issued $570,000 of 9%, 10-year bonds on June 30, 2020, for $471,929. This price provided a yield of 12% on the bonds. Interest is payable semiannually on December 31 and June 30. If Novak uses the effective-interest method, determine the amount of interest expense to record if financial statements are issued on October 31, 2020. (Round intermediate calculations to 6 decimal places, e.g. 1.251247 and final answer to O decimal places, e.g. 38,548.) Interest expense to be recorded $