On January 1, 2019, Hope CORPORATION issued 2,000 of its 5-year,

P1,000 face value, 11% bonds dated January 1 at an effective annual

interest rate (yield) of 9%. Interest is payable each December 31.
Hope uses the effective interest method of amortization. On December
31, 2020, the 2,000 bonds were extinguished early through acquisition
in the open market by Hope for P1,980,000.

On July 1, 2019, Hope issued 5,000 of its 6-year, P1,000 face value,
10% convertible bonds at par. Interest is payable every June 30 and
December 31. On the date of issue, the prevailing market interest
rate for similar debt without the conversion option is 12%. On July
1, 2020, an investor in Hope’s convertible bonds tendered 1,500 bonds
for conversion in 15,000 shares of Hope’s common stock, which had a
fair value of P105 and a par value of P1 at the date of conversion.

Based on the above, determine the following: (Round off present value
factors to four decimal places.)

1. The issue price of the 2,000 5-year, P1,000 face value bonds on
January 1, 2019

2. The carrying value of the 2,000 5-year, P1,000 value bonds on

December 31, 2019

3. The gain on early retirement of bonds on December 31, 2020

4. The carrying value of the 5,000 6-year, P1,000 face value bonds on
December 31, 2019

5. The conversion of the 1,500 6-year, P1,000 face value bonds on

July 1, 2020 will increase Share Premium by
The following data were obtained from BEBE COMPANY:

15%, 10-year, Bonds Payable, dated January 1, 2017

Debit Credit Balance
Cash proceeds from issue on January 1,
2017 of 1,000, P1,000 bonds. The market
rate of interest on the date of issue
was 12%. P1,172,044 P1,172,044

Bond Interest expense

Cash Paid, 1/2/18 P75,000 P 75,000

Cash paid, 7/1/18 75,000 150,000
Accrual, 12/31/18 75,000 75,000

Accrued Interest on Bonds

Balance, 1/1/18 P75,000 P 75,000

Accrual, 12/31/18 75,000 150,000

Treasury Bonds

Redemption price and interest to date

on 200 bonds permanently retired on
12/31/18 P265,000 P265,000

Based on the preceding information, determine the following:

1. Carrying value of bonds payable at December 31, 2018?

2. Loss on Bond Redemption?
3. Accrued Interest on Bonds at December 31, 2018?
4. Bond Interest Expense for the year ended December 31, 2018?