On January 1, 2021, MACADAMIA Company issued 5 year bonds with face value of ₱5,000,000 at 110. The company paid bond issued cost of ₱80,000 on same date. The stated interest rate on the bonds is 8% payable annually every December 31. After consideration of bond issue costs to be initially measured, the bonds were determined to yield 6% per annum. 1) On December 31, 2021, what should MACADAMIA report as interest expense for the year ended, December 31, 2021? A. ₱ 300,000 B. ₱ 295,200 C. ₱ 433,600 D. ₱ 325,200 2) On December 31, 2021, what should MACADAMIA report as carrying amount of the bonds payable? A. ₱ 5,414,800 B. ₱ 5,345,200 C. ₱ 5,430,800 D. ₱ 5,000,000
On January 1, 2021, MACADAMIA Company issued 5 year bonds with face value of ₱5,000,000 at 110. The company paid bond issued cost of ₱80,000 on same date. The stated interest rate on the bonds is 8% payable annually every December 31. After consideration of bond issue costs to be initially measured, the bonds were determined to yield 6% per annum. 1) On December 31, 2021, what should MACADAMIA report as interest expense for the year ended, December 31, 2021? A. ₱ 300,000 B. ₱ 295,200 C. ₱ 433,600 D. ₱ 325,200 2) On December 31, 2021, what should MACADAMIA report as carrying amount of the bonds payable? A. ₱ 5,414,800 B. ₱ 5,345,200 C. ₱ 5,430,800 D. ₱ 5,000,000
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, 2021, MACADAMIA Company issued 5 year bonds with face value of ₱5,000,000 at 110. The company paid bond issued cost of ₱80,000 on same date. The stated interest rate on the bonds is 8% payable annually every December 31. After consideration of bond issue costs to be initially measured, the bonds were determined to yield 6% per annum.
1) On December 31, 2021, what should MACADAMIA report as interest expense for the year ended, December 31, 2021?
A. ₱ 300,000
B. ₱ 295,200
C. ₱ 433,600
D. ₱ 325,200
2) On December 31, 2021, what should MACADAMIA report as carrying amount of the bonds payable?
A. ₱ 5,414,800
B. ₱ 5,345,200
C. ₱ 5,430,800
D. ₱ 5,000,000
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