Webb Company had outstanding a 7%, 10-year bond payable with face amount of P5,000,000. The bond was originally sold to yield 6% annual interest. The entity used the effective interest method to amortize bond premium. On January 1, 2021, the carrying amount of the bond payable was P5,250,000. 1. What amount of unamortized premium on bond payable should be reported on December 31, 2021? 2. What is the carrying amount of the bond payable on December 31, 2021?

Webb Company had outstanding a 7%, 10-year bond payable with face amount of P5,000,000. The bond was originally sold to yield 6% annual interest. The entity used the effective interest method to amortize bond premium. On January 1, 2021, the carrying amount of the bond payable was P5,250,000. 1. What amount of unamortized premium on bond payable should be reported on December 31, 2021? 2. What is the carrying amount of the bond payable on December 31, 2021?

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 15MCQ

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