1. On January 1, 2018, Karen Company purchased a serial bond with a face value of...
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1. On January 1, 2018, Karen Company purchased a serial bond with a face value of Php 3,000,000 at a cost of Php 3,102568. The stated interest of the bond is 12% and interest and principal are payable annually every December 31. The bonds are to be held with a 10% effective yield. The bonds mature at annual installment of Php 1,000,000 every year. Required: Based on the above, compute the following: 1. Interest income for 2018 2. Carrying amount of the investment in bond in December 31, 2018 3. Current portion of the bonds on December 31, 2018 4. Non-current portion of the bonds on December 31, 2018 5. Journal entries 1. On January 1, 2018, Karen Company purchased a serial bond with a face value of Php 3,000,000 at a cost of Php 3,102568. The stated interest of the bond is 12% and interest and principal are payable annually every December 31. The bonds are to be held with a 10% effective yield. The bonds mature at annual installment of Php 1,000,000 every year. Required: Based on the above, compute the following: 1. Interest income for 2018 2. Carrying amount of the investment in bond in December 31, 2018 3. Current portion of the bonds on December 31, 2018 4. Non-current portion of the bonds on December 31, 2018 5. Journal entries
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1 Interest income for 2018 The interest income for 2018 can be calculated using the effective interest method The effective interest rate is 10 and th... View the full answer
Related Book For
Intermediate accounting
ISBN: 978-0077647094
7th edition
Authors: J. David Spiceland, James Sepe, Mark Nelson
Posted Date:
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