Blue Company reported the following financial liabilities on December 31, 2014:

9% debentures, callable in 2015, due in 2016 3,500,000

11% collateral trust bonds, convertible into share

capital beginning in 2015, due in 2016 3,000,000

10% debentures (P300.000 maturing annually) 1,500,000

What is the total amount of term bonds? = 6,500,000

On January 1, 2014, XYZ Company issued 4-year bonds with face value of P4,000,000
at P4,395,800. The 12% stated rate is payable semiannually every June 30 and
December 31. In addition, the entity paid P137,430 in connection with the issuance of
the bonds. What is the effective rate of interest on the bonds on the date of issue? =
10%

Black Company issued P2,000,000 face value of 10-year bonds on January 1. The
bonds pay interest on January 1 and July 1 and had a stated rate of 10%. If the market
rate of interest is 8%, what is the issue price of the bonds? = 2,279,000

On October 1, 2014, ABC Company issued 5,000 of the PI,000 face value 12% bonds
at 110. The bonds which mature on January 1, 2019, pay interest semiannually on
January 1 and July 1. The entity paid bond issue cost of P200,000. How much cash was
received from the issuance of the bonds? = 5,450,000
On January 1, 2013, Borg Company issued 4,000 of 8% P2,000 face value bonds at 97
plus accrued interest. The bonds are dated October 1, 2012 and mature on October 1,
2022. Interest is payable semiannually on April 1 and October 1. Accrued interest for
the period October 1,2012 to January 1, 2013, amounted to P160,000. On January 1,
2013, what is the carrying amount of bonds payable? = 7,760,000

On January 31, 2014, Beau Company issued P3,000,000 maturity value, 12% bonds for
P3,000,000 cash. The bonds are dated December 31, 2013, and mature on December
31, 2023. Interest will be paid semiannually on June 30 and December 31. What
amount of accrued interest payable should be reported on September 30, 2014? =
90,000

On January 1, 2014, Trisha Company received P1,077,200 for Pl.000,000 face amount
12% bonds. The bonds were sold to yield 10%. Interest is payable semiannually every
January 1 and July 1. The entity has elected the fair value option for valuing financial
liabilities. On December 31, 2014, the fair value of the bonds is PI,064,600. The change
in fair value of the bonds is attributable to market factors.

What is the gain or loss from change in fair value of the bonds payable for 2014? =
12,600 gain

In order to finance a planned expansion, Verna Company issued 10% P5,000,000 face
value bonds for P5,300,000 plus accrued interest on December 1, 2011. Interest is
payable November 1 and May 1. On December 31, 2013, the carrying amount of the
bonds payable was reported at P5,150,000. The straight line amortization method is
used. On September 1, 2014, the entity decided to reacquire the bonds at face value
plus accrued interest. What amount should be recorded as gain or loss on the
extinguishment of debt? = 102,000 gain

Marie Company reported the following balances on December 31, 2014:

Bonds payable 7,360,000

Interest payable 200,000

The bonds are retired on January 1, 2015 for P8,160,000 excluding interest. What
amount should be reported as gain or loss on redemption? = 800,000 loss