Yelan Company issued P8,000,000 bonds on bond issue date, December 31, 2022. The bonds pay interest annually at 8% on the outstanding bond balance. The face value of the bonds is payable in installments of P1,600,000 every December 31, starting December 31, 2023. The bonds were sold at a price that yields 12%. PV factor of P1 lumpsum using 12% for 1 period is 8929 PV factor of P1 lumpsum using 12% for 2 period is .7972 PV factor of P1 lumpsum using 12% for 3 period is .7118 PV factor of P1 lumpsum using 12% for 4 period is 6355 PV factor of P1 lumpsum using 12% for 5 period is 5674 Required: Determine the issue price of the bonds on December 31, 2022. How much interest expense must Yelan Company recognize for the year ended December 31, 2023? Determine the amortized cost of the bonds payable as of December 31, 2024.
Yelan Company issued P8,000,000 bonds on bond issue date, December 31, 2022. The bonds pay interest annually at 8% on the outstanding bond balance. The face value of the bonds is payable in installments of P1,600,000 every December 31, starting December 31, 2023. The bonds were sold at a price that yields 12%. PV factor of P1 lumpsum using 12% for 1 period is 8929 PV factor of P1 lumpsum using 12% for 2 period is .7972 PV factor of P1 lumpsum using 12% for 3 period is .7118 PV factor of P1 lumpsum using 12% for 4 period is 6355 PV factor of P1 lumpsum using 12% for 5 period is 5674 Required: Determine the issue price of the bonds on December 31, 2022. How much interest expense must Yelan Company recognize for the year ended December 31, 2023? Determine the amortized cost of the bonds payable as of December 31, 2024.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Yelan Company issued P8,000,000 bonds on bond issue date, December 31, 2022. The
bonds pay interest annually at 8% on the outstanding bond balance. The face value of the
bonds is payable in installments of P1,600,000 every December 31, starting December
31, 2023. The bonds were sold at a price that yields 12%.
PV factor of P 1 lumpsum using 12% for 1 period is 8929
PV factor of P 1 lumpsum using 12% for 2 period is .7972
PV factor of P1 lumpsum using 12% for 3 period is .7118
PV factor of P1 lumpsum using 12% for 4 period is 6355
PV factor of P1 lumpsum using 12% for 5 period is 5674
Required:
Determine the issue price of the bonds on December 31, 2022.
How much interest expense must Yelan Company recognize for the year ended December
31, 2023?
Þetermine the amortized cost of the bonds payable as of December 31, 2024.
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