On March 1, 2020, Pyramid Company issued 10% bonds with face amount of P7,000,000 to yield 8%. Interest is payable semiannually on March 1 and September 1. The bonds mature in 10 years. The entity follows the calendar year.

Required:
1. Determine the market price or issue price of the bonds.
2. Prepare an effective interest amortization table for the first two interest periods.
3. Prepare journal entries for 2020.

Answer rating: 100% (QA)

1 To determine the market price or issue price of the bonds we need to use the present value formula ... View the full answer