FINANCIAL ACCOUNTING
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ISBN: 9781259964947
Author: Libby
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Transcribed Image Text:Bonds with a face value of P5,000,000 carrying a stated interest rate of 12% payable semi-
annually on March 1 and September 1 were issued on July 1. The total proceeds from the issue
amounted to P5,200,000. The best explanation for the excess amount received over face value is *
the bonds were sold at a premium.
the bonds were issued at face value plus accrued interest.
O no explanation is possible without knowing the maturity date of the bond issue.
the bonds were sold at a higher effective interest rate.
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