On January 1, 2014, Pop Corp. Issued 3,000 of its 9 %, P 1,000 bonds when the prevailing rate of interest was 8%. Interest is payable annually every January 1. The bonds mature on January 1, 2019, Pop paid transactions cost of P 24,460 in relation to the issue of the debt instruments and in effect the yield rate is 8.2%. Pop uses effective method of amortization.

On January 1, 2014, Pop Corp. Issued 3,000 of its 9 %, P 1,000 bonds when the prevailing rate of interest was 8%. Interest is payable annually every January 1. The bonds mature on January 1, 2019, Pop paid transactions cost of P 24,460 in relation to the issue of the debt instruments and in effect the yield rate is 8.2%. Pop uses effective method of amortization.

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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On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?
Naval Inc. issued $200,000 face value bonds at a discount and received $190,000. At the end of 2018, the balance in the Discount on Bonds Payable account is $5,000. This years balance sheet will show a net liability of ________. A. $200,000 B. $180,000 C. $195,000 D. $205,000
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