FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
ilT GLOBE 7:38 31 of 37 15. Bonds with a face value of P5.0 million, carrying a stated interest rate of 12%; payable semiannually 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 that * a. the bonds were sold at a premium. b. the bonds were sold at a higher effective interest rate. c. the bonds were issued at face value plus accrued interest. d. no explanation is possible without knowing the maturity date of the bond issue. 0
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Transcribed Image Text:ilT GLOBE 7:38 31 of 37 15. Bonds with a face value of P5.0 million, carrying a stated interest rate of 12%; payable semiannually 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 that * a. the bonds were sold at a premium. b. the bonds were sold at a higher effective interest rate. c. the bonds were issued at face value plus accrued interest. d. no explanation is possible without knowing the maturity date of the bond issue. 0
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