On January 1, 2021, Demeanor Company purchased bonds with face amount of P5,000,000 to be held as financial assets at amortized cost. The entity paid P4,600,000 plus transaction cost of P142,000. The bonds mature on December 31, 2023 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2021. The bonds are sold at 110 on December 31, 2022 Required: 1. Prepare a table of amortization of the discount. 2. Prepare journal entries for 2021 and 2022.

On January 1, 2021, Demeanor Company purchased bonds with face amount of P5,000,000 to be held as financial assets at amortized cost. The entity paid P4,600,000 plus transaction cost of P142,000. The bonds mature on December 31, 2023 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2021. The bonds are sold at 110 on December 31, 2022 Required: 1. Prepare a table of amortization of the discount. 2. Prepare journal entries for 2021 and 2022.

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 95PSA

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