On January 1, 2020, PS ind issued P600,000 of 7% bonds, due in 10 years. The bonds were issued for P559,231, and pay interest each July 1 and January 1. It uses the effective- interest method. Prepare the company's journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%.

On January 1, 2020, PS ind issued P600,000 of 7% bonds, due in 10 years. The bonds were issued for P559,231, and pay interest each July 1 and January 1. It uses the effective- interest method. Prepare the company's journal entries for (a) the January 1 issuance, (b) the July 1 interest payment, and (c) the December 31 adjusting entry. Assume an effective-interest rate of 8%.

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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