mount of P17, 00 000 on : on the bonds is payable semiannually ind October 1 of each year. The bonds were sold to underwriters on April 1, 2026 t The entity amortizes discount or premium only” at the the fiscal year, using the straight line method. Required: 1. Prepare journal entries for 2020 and 2021 inclu 1, -Prepa adjustments at the end of each year. Use memorand relatin approach. eet 2.. Present the bonds payable in the statement of financial | meth position on December 31, 2021. 2. Presel Problein 5-2 (IAA) positi Interlink Company was authorized to issue 10-year, 12%) Problex bonds with face amount of P8,000,000. The bonds are dat January 1, 2020, and interest is payable semiannually on OnJanue June 30 and December 31. The bonds were sold as follows: amount o January 1, 2020 5,000,000 at 95 WE Interest. September 1, 2021 2,000,000 at 103 plus accrued inte Be thature c Required: 1. Prepare journal entries relating to the bonds payable 2020 and 2021, _ Straight line amortization is used, and ‘payable account is set up.— e issue was sold on April 1, 2020, at 98 lees b : July 1, 2021, bonds of P2,000,000 face amount were Y seed and retired at 99 plus accrued interest. Required: 1 Prepare journal entries including any adjustments relating to the issuance of the bonds for 2020 and 2021. Use memorandum approach and the straight line method of amortization. 9, Present the bonds payable in the statement of financial position on December 31, 2021. Problem 5-4 (IAA) OnJanuary 1, 2020, Lyka Company issued 12% bonds with face amount of P4,000,000 for P4, 200,000. Interest is payable annually on December 31 and the bonds mature on January 1, 2025. On December 31, 2020, bonds with face amount of P1,000,000 were redeemed at 95. The entity used the straight line method of amortization. are journal entries in 2020 and 2021. t the bonds payable on December 31, 2021.Discount on Bonds Payable Jan. 1, 2013 Required: 1, Compute the balance of bonds payable and:discount bonds payable on December 31, 2020. The straight li method of amortization is used. 7 . Compute bond interest expense for the year en December 31, 2020. Interest is payable semiannually January 1 and July 1. 3. Prepare adjusting entries on December 31, 2020. Problem 5-6 (IAA) Mara Company reported the following accounts on Decel 31, 2020: Premium on bonds payable Accrued interest on vonds payable Bonds payable, due January 1, 2026, interest at 12% payable semiannually on January 1 and July 1 On December 31, 2020, cash of P3,900,000 was made a’ from the sale of 10-year 10% bonds with face am P4,000,000. ; Re! cash received from the new issue was used for e 12% bonds at a call price of 102 plus accrued Payabl due on2023 2024 2025 2026 2027 Required: a. Prepare a schedule showing the annual amortization of the bond discount using the bond outstanding method. b. Prepare journal entries from 2020 to’2023. Problem 5-8 (IAA) On December 31, 2020, Fame Company sold a 12% serial bond issue with face amount of P7,000,000 for P7,420,000. The bonds mature in the amount of P 1,000,000 on December 81 of each year beginning December 31, 2021 and interest is payable annually. On December 31, 2022, the entity retired P1,000,000 of bonds due on that date and in addition purchased at 105 and retired with face amount of P1,000,000 which were due on _ December 31, 2024. ed: journal entries from 2020 to 2022. method of amortization is used.Problem 5-10 (AICPA Adapted) wa Hancock Company reported the following noney liabilities on December 31, 2020: Unsecured 9% registered bond, P250,000 maturing annually beginning in 2021 11% convertible bonds, callable beginning in 2021, due 2022 Secured 12% guaranty security bonds, due 2022 10% commodity backed bonds, P500,000 maturing annually beginning in 2021 1. What total a:aount of serial bonds should be repo a 4,750,000 b. 8,750,000 ¢. 4,500,000 d. 2,000,000problem 5-12 (AICPA Adapted) On April 1, 2020, Greg Company issued, at 99 plus accrued interest, 4,000 8% bonds with face amount of P1,000 per bond. ‘The bonds are dated January 1, 2020, mature on January 1, 2030, and pay interest on January 1 and July 1. The entity paid bond issue cost of P140,000. How much cash was received from the bond issuance? a, 4,040,000 b. 3,960,000 ¢, 3,900,000 d. 3,820,000 Problem 5-13 (AICPA Adapted) OnJuly 1, 2020, Carol Company issued at 104, five thousand 10% bonds with face amount of P1,000 per bond. The bonds Were issued through an underwriter to whom the entity paid “bond issue cost of P125,000. On July 1, 2020, what is the carrying amount of the bonds Payable?a. 1,950,000 b. 2,150,000 ¢. 1,800,000 d. 2,000,000 Problem 5-15 (IAA) a Aye Company is authorized to issue P5,000,000 of g 10-year bonds dated July 1, 2020 with interest payments June 30 and Décember 31. When the bonds are issued g November 1, 2020, the entity received cash of P5,150,00 including accrued interest. What is the discount or premium from the issuance of th bonds? a. 150,000 bond premium b. 50,000 bond premium ¢. 150,000 bond discount d. No bond premium and discount Problem 5-16 (AICPA Adapted) On November 1, 2020, Mason Company issued P4,000,000 10-year, 8% term bonds dated October 1, 2020. The bonds ¥ sold to yield 10% with total proceeds of P3,500,000 plus a interest. Interest is paid every April 1 and October 1. What amount should be reported as accrued interest on December 31, 2020? ; Probl On Jar of P8,0 On Ja outsta P100,c Whati 99,000 i problem 5-18 (AICPA Adapted) Qn June 30, 2020, King Company had outstanding 9%, 5,000,000 face value bonds maturing on June 30, 2025. Interest is payable semiannually every June 80 and December 1. On June 30, 2020, after amortization was recorded for the period, the unamortized bond premium and unamortized pond discount were P30,000 and P50,000, respectively. On that date, the entity acquired all outstanding bonds on the open market at 98 and retired them. On June 30, 2020, what amount should be recognized as gain on redemption of bonds? : a. 20,000 b. 80,000 ¢e. 120,000 d. 180,000 Problem 5-19 (AICPA Adapted) On January 1, 2020, Nilo Company reported bonds payable of P8,000,000 and related unamortized discount of P430,000. On January 1, 2020, the entity retired P4,000,000 of the Outstanding bonds at face amount plus a call premium of P100,000. What amount should be reported in the 2020 income _ Statement as loss on early extinguishment of debt?entity elected the fair value option, 0, the bonds are quoted at 95. 1. What amount should be reported as interes 2020? _a- 240,000 Tm ool b. 120,000 c. 294,208 d. 220,656 2. What amount should be reported as gain or loss f change in fair value for 2020? a, 322,400 gain b. 322,400 loss c. 122,400 gain -d° 122,400 loss 3. What is the carrying amount of the bonds payabl December 31, 2020? a. 3,677,600 +B. 3,800,000 c. 8,498,720 d. 4,000,000ae entity elected the fair value option. On December 31, 020, the fair value of the bond is determined to be P5,125,000 pased 02. market and interest factors. , What amount should be reported as interest expense for 2020? a, 600,000 b. 500,000 c. 646,200 d. 538,500 . What is the gain or loss that should be recognized in 2019 to report the bond at fair value? . 260,000 gain . 260,000 loss a. b. ¢. 600,000 loss d. 340,000 loss . What is the carrying amount of the bonds payable on December 31, 2020? a. 5,385,000 b. 5,125,000 ¢. 5,000,000 d. 5,250,000 . Prepare journal entries for 2020._ The entity elected the fair value option. On "2020, the fair value of the bonds is 105. It is reliably determined that the fair value j comprised P150,000 attributable to credit risk ang remainder attributable to change in the market interest; 1, What is the interest expense for 2020? a. 800,000 ae b. 760,000 c. 840,000 2. What “d. 880,000 ‘a. 7 2. What amount of gain or loss should be recognized in pi Bs 4 or loss for 2020 to conform with the fair value opti ac 1 a. 650,000 gain 3. What b. 650,000 loss bond c. 800,000 gain d. 800,000 loss a ‘ 3. What is the carrying amount of the bonds payable a 4 December 31, 2020? a. 8,000,000 b. 7,600,000 . 8,400,000 7,640,0001a Comps with face amount of P1,000,000. The d to yield 10%. Interest is payable semiannua sry January 1 and July 1. entity elected the fair value option for measuring financial On December 31, 2020, the fair value of the bonds is _ pi,064,600. The change in fair value of the bonds is attributable to market factors. j, What is the carrying amount of the bonds payable on January 1, 2020? a. 1,000,000 b. 1,077,200 c 500,000 d. 538,600 2, What is the interest expense for 2020? a. 120,000 b. 100,000 ¢. 107,720 d, 129,264 8. What is the gain or loss from change in fair value of the bonds payable for 2020? . 64,600 gain . 64,600 loss . 12,600 gain . 12,600 loss 4, What is the carrying amount of the bonds payable on December 31, 2020?