On January 1, 2021, PAPASA BA AKO Company purchased 5-year bonds with face value of P8,000,000 and stated interest of 10% per year payable semiannually on January 1 and July 1. The bonds were acquired to yield 8%. The effective interest method of amortization is used. Present value factors are: Present value of an annuity of 1 for 10 periods at 5% = 7.72; Present value of an annuity of 1 for 10 periods at 4% = 8.11; Present value of 1 for 10 periods at 4% = 0.6756. What is the carrying amount of the bond investment on December 31, 2021 (round off final answer)?

On January 1, 2021, PAPASA BA AKO Company purchased 5-year bonds with face value of P8,000,000 and stated interest of 10% per year payable semiannually on January 1 and July 1. The bonds were acquired to yield 8%. The effective interest method of amortization is used. Present value factors are: Present value of an annuity of 1 for 10 periods at 5% = 7.72; Present value of an annuity of 1 for 10 periods at 4% = 8.11; Present value of 1 for 10 periods at 4% = 0.6756. What is the carrying amount of the bond investment on December 31, 2021 (round off final answer)?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 4EA: On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated...

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