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On January 1, 2021, PRANCER Company was authorized to issue 12% bonds with a face amount of P5,000,000. Interest on bonds is payable semiannually on January 1 and July. Bonds mature on January 1, 2026. The entire issue was sold on February 28, 2021 at 96 including interest. Bond issue cost amounts to P180,000. On October 1, 2023, bonds of P2,000,000 face amount were retired at 98 plus accrued interest.

On January 1, 2021, PRANCER Company was authorized to issue 12% bonds with a face amount of P5,000,000. Interest on bonds is payable semiannually on January 1 and July. Bonds mature on January 1, 2026. The entire issue was sold on February 28, 2021 at 96 including interest. Bond issue cost amounts to P180,000. On October 1, 2023, bonds of P2,000,000 face amount were retired at 98 plus accrued interest.

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable
Section: Chapter Questions
Problem 8RE
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How much cash was received on February 28, 2021? How much discount or premium was initially recognized? (In the google form, if discount, put a negative sign before the numerical figure.) How much is the interest expense for the vear ended December 31, 2021?
Transcribed Image Text:How much cash was received on February 28, 2021? How much discount or premium was initially recognized? (In the google form, if discount, put a negative sign before the numerical figure.) How much is the interest expense for the vear ended December 31, 2021?
On January 1, 2021, PRANCER Company was authorized to issue 12% bonds with a face amount of P5,000,000. Interest on bonds is payable semiannually on January 1 and July. Bonds mature on January 1, 2026. The entire issue was sold on February 28, 2021 at 96 including interest. Bond issue cost amounts to P180,000. On October 1, 2023, bonds of P2,000,000 face amount were retired at 98 plus accrued interest.
Transcribed Image Text:On January 1, 2021, PRANCER Company was authorized to issue 12% bonds with a face amount of P5,000,000. Interest on bonds is payable semiannually on January 1 and July. Bonds mature on January 1, 2026. The entire issue was sold on February 28, 2021 at 96 including interest. Bond issue cost amounts to P180,000. On October 1, 2023, bonds of P2,000,000 face amount were retired at 98 plus accrued interest.
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