Problem 5: On January 1, 2021, BLITZEN Company issued 10% bonds dated January 1, 2021 with a face amount of P8,000,000. The bonds mature on December 31, 2026. For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semi-annually on June 30 and December 31. (Use at most, 4 decimal places for PV factors) J. Prepare the journal entries for 2021 K. Compute or provide the answers for the following: 22. Determine the price of the bonds on January 1, 2021. 23. How much is the interest expense for the year ended, December 31, 2021? 24. How much is the interest expense for the year ended, December 31, 2022? 25. What is the carrying amount of the bonds on December 31, 2022?
Problem 5: On January 1, 2021, BLITZEN Company issued 10% bonds dated January 1, 2021 with a face amount of P8,000,000. The bonds mature on December 31, 2026. For bonds of similar risk and maturity, the market yield is 14%. Interest is paid semi-annually on June 30 and December 31. (Use at most, 4 decimal places for PV factors) J. Prepare the journal entries for 2021 K. Compute or provide the answers for the following: 22. Determine the price of the bonds on January 1, 2021. 23. How much is the interest expense for the year ended, December 31, 2021? 24. How much is the interest expense for the year ended, December 31, 2022? 25. What is the carrying amount of the bonds on December 31, 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 48BE: Brief Exercise Debt Issued at Par On January 1, 2020, Desmond & Co. issued 5,000 bonds with a SI,000...
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