Megan, Inc., sold $500,000 of its 9%, five-year bonds dated January 1, 2018, on May 1, 2018, for $493,000 plus accrued interest. Interest is paid on January 1 and July 1 and straight-line amortization is used. The net liability for the bonds after recording the sale would be a. $508,000 b. $507,700 c. $500,000 d. $493,000

Megan, Inc., sold $500,000 of its 9%, five-year bonds dated January 1, 2018, on May 1, 2018, for $493,000 plus accrued interest. Interest is paid on January 1 and July 1 and straight-line amortization is used. The net liability for the bonds after recording the sale would be a. $508,000 b. $507,700 c. $500,000 d. $493,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On July 01, 2019, SALUDO RAW SA'YO SI MAGELLAN SABI NI LOLA CO. received P1,032,880 for P1,000,000 face amount, 12% bonds, a price that yields 10%. Using the interest method of amortization, how much is the interest expense for the six months ended December 31, 2019? a. P61,973 b. P60,000 c. P51,644 d. P50,000
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