The amortization entry at Dec 31, 20X2 will include: PV of P1 at 12% for 3n = . 71178 PV of P1 at 10% for 3n = .75131 PV ordinary annuity at 12% for 3n = 2.40183 PV ordinary annuity at 10% for 3n = 2.48685 Dr Cash 480,000 Cr Cash 400,000 Cr Interest Expense 66,118 Dr Interest Expense 66,118
The amortization entry at Dec 31, 20X2 will include: PV of P1 at 12% for 3n = . 71178 PV of P1 at 10% for 3n = .75131 PV ordinary annuity at 12% for 3n = 2.40183 PV ordinary annuity at 10% for 3n = 2.48685 Dr Cash 480,000 Cr Cash 400,000 Cr Interest Expense 66,118 Dr Interest Expense 66,118
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 20x1, ABC Co. issued 1,000, ₱4,000, 12%, 3-year bonds. Principal is due on December 31, 20x3 but interests are due annually every year-end. The effective interest rate is 10%. The amortization entry at Dec 31, 20X2 will include:
PV of P1 at 12% for 3n = . 71178 PV of P1 at 10% for 3n = .75131
PV ordinary annuity at 12% for 3n = 2.40183 PV ordinary annuity at 10% for 3n = 2.48685
PV of P1 at 12% for 3n = . 71178 PV of P1 at 10% for 3n = .75131
PV ordinary annuity at 12% for 3n = 2.40183 PV ordinary annuity at 10% for 3n = 2.48685
Dr Cash 480,000
Cr Cash 400,000
Cr Interest Expense 66,118
Dr Interest Expense 66,118
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