BOND PAYABLE

GREEN TEA COMPANY reported the following finacial liabilities on December 31, 2020:

9% debentures, callable in 2021, due in 2022 3,500,000.00

11% collateral trust bonds, convertible into share 3,000,000.00
capital beginning in 2021, due in 2022
10% debentures, 300,000 maturing annually 1,500,000.00

1. What is the total amount of term bonds?

A. 3,000,000.00
B. 3,500,000.00
C. 5,000,000.00
D. 6,500,000.00

2. What is the total amount of secured bonds?

A. 3,000,000.00
B. 3,500,000.00
C. 5,000,000.00
D. 6,500,000.00

3. On April 1, 2020, MATCHA COMPANY issued, at 99 plus accrued interest,

4,000 8% bonds with face amount of P1,000 per bond. The bonds are dated
January 1, 2020, mature on January 1, 2030, and pay interest on January 1
and July 1. The entity paid bond issue cost of P80,000

How much cash was received from the bond issuance?

A. 4,040,000.00
B. 3,960,000.00
C. 3,900,000.00
D. 3,820,000.00

4. On January 31, 2020, WINTERMELON COMPANY issued P3,000,000

maturity value, 12% bonds for P3,000,000 cash. The bonds are dated
December 31, 2019, and mature on December 31, 2029. Interest will be paid
semiannually on June 30 and December 31.

What amount of accrued interest payable should be reported on

September 31, 2020?
A. 360,000.00
B. 90,000.00
C. 180,000.00
D. 99,000.00

5. On January 1, 2020, OKINAWA COMPANY reported bonds payable of P8,000,000

and related unamortized discount of P430,000.
On January 1, 2020, the entity retired P4,000,000 of the outstanding bonds at
face amount plus a call premium of P100,000.

What amount should be reported in the 2020 income statement

as loss on early extinguishment of debt?
A. 0
B. 100,000.00
C. 215,000.00
D. 315,000.00

6-8 On February, 2020, BUBBLE TEA COMPANY issued 6% bonds with

face amount of P4,000,000 for net proceeds of P3,677,600 a price that yields
8%. Interest is payable annually every December 31.

The entity elected the fair value option. On December 31, 2020, the bonds
are quoted at 95.

6. What amount should be reported as interest expense for 2020?

A. 240,000.00
B. 120,000.00
C. 294,208.00
D. 220,000.00

7. What amount should be reported as gain or loss from change in fair value for 2020?
A. 322,400 gain
B. 322,400 loss
C. 122,400 gain
D. 122,400 loss

8. What is the carrying amount of the bonds payable on December 31, 2020?
A. 3,677,600.00
B. 3,800,000.00
C. 3,493,720.00
D. 4,000,000.00

On June 1, 2020, TARO COMPANY received P1,077,200 for 12% bonds with
face amount of P1,000,000. The bonds were sold to yield 10%. Interest is payable
semiannually every January 1 and July 1.

The entity elected the fair valur option for measuring financial liabilities.

On December 31, 2020, the fair value of the bonds is P1,064,000. The change
in fair value of the bonds is attributable to market factors.

9. What is the carrying amount of the bonds payable on January 1, 2020?

A. 1,000,000.00
B. 1,077,200.00
C. 500,000.00
D. 538,600.00

10. What amount should be reported as interest expense for 2020?

A. 120,000.00
B. 100,000.00
C. 70,000.00
D. 129,264.00

11. What amount should be reported as gain or loss from change in fair value for 2020?
A. 64,600 gain
B. 64,600 loss
C. 12,600 gain
D. 12,600 loss

12. What is the carrying amount of the bonds payable on December 31, 2020?
A. 1,064,600.00
B. 1,077,200.00
C. 1,000,000.00
D. 1,064,920.00

13. Bonds payable should be reported as noncurrent at

A. Face amount less any unamortized discount or plus any unamortized premium
B. Current market price
C. Face amount plus any unamortized discount or less any unamortized premium
D. Face amount less accrued interest since the last interest payment date

14. The discount on bonds payable is reported as

A. A prepaid expense
B. An expense account
C. A current liability
D. A contra liability

15. Debentures are

A. Unsecured bonds
B. Secured bonds
C. Ordinary bonds
D. Serial bonds