1 On January 1, 2021, Nebraska Company issued a 3-year bond with face value of P1,500,000 and a 9% stated rate. The bonds mature on January 1, 2024 and interest is payable annually on December 31. The bonds are issued with an effective yield of 10%. The company also paid bond issue costs. Because of the bond issue costs, the adjusted effective rate is 11%. Assuming that the bonds was retired on June 30, 2023 at total payment of P1,520,000. How much is the gain on retirement of bonds? ?

1 On January 1, 2021, Nebraska Company issued a 3-year bond with face value of P1,500,000 and a 9% stated rate. The bonds mature on January 1, 2024 and interest is payable annually on December 31. The bonds are issued with an effective yield of 10%. The company also paid bond issue costs. Because of the bond issue costs, the adjusted effective rate is 11%. Assuming that the bonds was retired on June 30, 2023 at total payment of P1,520,000. How much is the gain on retirement of bonds? ?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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