Problem 6-27 (AICPA Adapted)On January 1, 2021, Angel Company issued 5-year 5,000 bondspayable with face amount of P1,000 per bond for P5,380,000to yield 10%. Interest of 12% is payable annually everyDecember 31.On June 30, 2022, the entity retired 2,000 bonds at 96 plusaccrued interest. The entity used the interest method.1. What amount should be recognized as gain or loss onretirement of bonds payable on June 30, 2022?a. 193,560 gainb. 193,560 lossc. 179,920 gaind. 179,920 loss2. What is the carrying amount of the remaining bondspayable on December 31, 2022?a. 3,228,000b. 3,190,000c. 3,149,880d. 3,129,420251

Bond In exchange for regular interest payments, a bondholder loans money to a business or the…

Answered: a. 193,560 gain b. 193,560 loss c.…

a. 193,560 gain b. 193,560 loss c. 179,920 gain d. 179,920 loss What is the carrying amount of the remaining bonds payable on December 31, 2022? a. 3,228,000 b 3.190.000

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 96PSA

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Question

Problem 6-27 (AICPA Adapted)
On January 1, 2021, Angel Company issued 5-year 5,000 bonds
payable with face amount of P1,000 per bond for P5,380,000
to yield 10%. Interest of 12% is payable annually every
December 31.
On June 30, 2022, the entity retired 2,000 bonds at 96 plus
accrued interest. The entity used the interest method.
1. What amount should be recognized as gain or loss on
retirement of bonds payable on June 30, 2022?
a. 193,560 gain
b. 193,560 loss
c. 179,920 gain
d. 179,920 loss
2. What is the carrying amount of the remaining bonds
payable on December 31, 2022?
a. 3,228,000
b. 3,190,000
c. 3,149,880
d. 3,129,420
251

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