On January 1, 20x1, SALIENT PROMINENT Co. issued 1,000, P4, 000, 12%, 3-year bonds for F 4,412,336. Principal is due on December 31, 20x3 but interests are due annually every year - end. In addition, SALIENT incurred bond issue cost of P213, 388. What is the effective interest rate on the bond issue?

On January 1, 20x1, SALIENT PROMINENT Co. issued 1,000, P4, 000, 12%, 3-year bonds for F 4,412,336. Principal is due on December 31, 20x3 but interests are due annually every year - end. In addition, SALIENT incurred bond issue cost of P213, 388. What is the effective interest rate on the bond issue?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 6EA: Oak Branch Inc. issued $700,000 of 5%, 10-year bonds when the market rate was 4%. They received...

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