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Accounting

What is the carrying amount of the bond investment on December 31, 2021? ( round off final answer)

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...

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Question

On January 1, 2021, PAPASA BA AKO Company purchased 5-year bonds with face value of P8,000,000 and stated interest of 10% per year payable semiannualy on January 1 and July 1. The bonds were acquired to yeild 8%. The effective interest method of amortization is used. Present value factors are: Present value of an annuity of 1 for 10 periods at 5%=7.72; Present value of an annuity of 1 for 10 periods at 4%= 8.11; Present value of 1 for 10 periods at 4%= 0.6756. What is the carrying amount of the bond investment on December 31, 2021? ( round off final answer)

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