Evaluate the following statements: S1 The proceeds of a bond with a face amount of P100,000,000 which sells at 102 will be P102,000,000. S2 The proceeds of a bond with a face amount of P100,000,000 which sells at 98 will be P98,000,000. S3 When bonds are issued at a discount, the bonds payable account may be credited for the proceeds from the issue. S4 When bonds are issued at a premium, amortizing the premium using the effective interest method, will increase the amortization. a. Only 1 statement is correct b. All statements are correct c. Only 2 statements are correct d. Only 3 statements are correct e. All statements are incorrect
Evaluate the following statements: S1 The proceeds of a bond with a face amount of P100,000,000 which sells at 102 will be P102,000,000. S2 The proceeds of a bond with a face amount of P100,000,000 which sells at 98 will be P98,000,000. S3 When bonds are issued at a discount, the bonds payable account may be credited for the proceeds from the issue. S4 When bonds are issued at a premium, amortizing the premium using the effective interest method, will increase the amortization. a. Only 1 statement is correct b. All statements are correct c. Only 2 statements are correct d. Only 3 statements are correct e. All statements are incorrect
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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20.1 Evaluate the following statements:
S1 The proceeds of a bond with a face amount of P100,000,000 which sells at 102 will be P102,000,000.
S2 The proceeds of a bond with a face amount of P100,000,000 which sells at 98 will be P98,000,000.
S3 When bonds are issued at a discount, the bonds payable account may be credited for the proceeds from the issue.
S4 When bonds are issued at a premium, amortizing the premium using the effective interest method, will increase the amortization.
a. Only 1 statement is correct
b. All statements are correct
c. Only 2 statements are correct
d. Only 3 statements are correct
e. All statements are incorrect
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