JR Company showed the following balances in connection with its noncurrent liabilities on December 31, 2020.

Bonds payable – 10%, maturing December 31, 2025	P10,000,000
Bonds payable – 12%, maturing December 31, 2030	8,000,000
Discount on bonds payable	800,000
Premium on bonds payable	500,000
Bond issue costs	200,000

The discount is related to the 10% bonds payable and the premium and bond issue costs are applicable to the 12% bonds payable. No bonds were retired during 2020. How much interest expense on the bonds payable should JR Company report in its 2020 income statement? (Use straight line amortization method)

A P2,090,000 

B P1,870,000 

C P2,070,000 

D P1,890,000

Answer rating: 100% (QA)

STEP 1 Interest expense on 10 Bond Payable Years to maturity Decemmber 31 2020 De... View the full answer