On January 1, 20x1, Eduard Co. acquired 12%, P4,000,000 bonds for P4,198,948. The principal is due on December 31, 20x3 but interest is made annually starting December 31, 20x1. The effective interest rate on the bonds is 10%. 13. How much is the interest income recognized in 20x1? a. 419,895 b. 413,884 c. 407,273 d. 480,000 14. How much is the carrying amount of the investment on December 31, 20x1? a. 4,198,948 b. 4,138,843 c. 4,072,727 d. 4,000,000
On January 1, 20x1, Eduard Co. acquired 12%, P4,000,000 bonds for P4,198,948. The principal is due on December 31, 20x3 but interest is made annually starting December 31, 20x1. The effective interest rate on the bonds is 10%. 13. How much is the interest income recognized in 20x1? a. 419,895 b. 413,884 c. 407,273 d. 480,000 14. How much is the carrying amount of the investment on December 31, 20x1? a. 4,198,948 b. 4,138,843 c. 4,072,727 d. 4,000,000
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 7MCQ
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On January 1, 20x1, Eduard Co. acquired 12%, P4,000,000 bonds for P4,198,948. The
principal is due on December 31, 20x3 but interest is made annually starting December 31,
20x1. The effective interest rate on the bonds is 10%.
13. How much is the interest income recognized in 20x1?
a. 419,895
b. 413,884
c. 407,273
d. 480,000
14. How much is the carrying amount of the investment on December 31, 20x1?
a. 4,198,948
b. 4,138,843
c. 4,072,727
d. 4,000,000
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