INTERMEDIATE ACC.

1.

An entity includes one coupon in each box of laundry soap it sells. A towel is offered as a premium to customers who send in 10 coupons and a remittance of P10. Dostribution cost of premium is P5. Experience indicates that only 30% of the coupons will be redeemed. 2019 2020 Boxes of soap sold 2,000,000 2,500,000 Number of towels purchased at P50 each 50,000 80,000 Coupons redeemed 400,000 700,000 What is the premium expense for 2020? Select the correct response: O 3,375,000 O 3,750,000 O 3,000,000 4,000,000After recording interest and amortization, Eric converted P5,000,000 of 12% convertible bonds into 50,000 shares of P50 par value. On the conversion date, the carrying amount of the bonds payable was P6,000,000, the market value of the bonds was P6,500,000, and the share was publicly trading at P150. The entity incurred P100,000 in connection with the conversion. When the bonds were originally issued, the equity component was recorded at 1,500,000. What amount of share premium should be recorded as a result of the conversion? Select the correct response: O 4,900,000 O 5,000,000 O 3,500,000 O 3,400,000On January 1, 2018, Dianne Co. issued 3-year bonds with a face value of P1,200,000 and stated interest of 8% per year. The bonds mature in 3 equal annual installments every December 31. The interest is also payable every December 31. The bonds were acquired to yield 10%. The bonds were appropriately classified as financial liability at amortized cost. How much is the interest expense for 2018? (round off present value factors up to four decimals places) Select the correct response: O 115,892 O 107,934 O 174,604 O 143,212