Answers:

A.
1. Present Value of the Bonds Payable:
₱1,000,000
Date Principal PaymeInterest PaymenTotal Paymen
Year 1 ₱250,000 ₱50,000 ₱300,000
Year 2 ₱250,000 ₱37,500 ₱287,500
Year 3 ₱250,000 ₱25,000 ₱275,000
Year 4 ₱250,000 ₱12,500 ₱262,500
Total Present Value
Face Amount
Discount on Bonds Payable

2. Amortization Table
5% 6%
Date (Yr.) Nominal Rate Effective Rate Amortization
1/1/2023
1 ₱50,000 ₱58,663 ₱8,663
2 ₱37,500 - -
3 ₱25,000 - -
4 ₱12,500 - -
₱125,000
3. Related Journal Entries:
Date Account Particulars Debit
1/1/2023 Cash ₱977,711.25
Discounts on Bonds Payable ₱22,288.75
Bonds Payable
To record issuance of bonds.
### Interest Expense ₱250,000
Bonds Payable ₱58,663
Discount on Bonds Payable
Cash
To record payment of principal plus interest and amortiza
B.
1. Face Amount
Multiply by Nominal Rate
Annual Interest Received
Multiply by Time Period (6/12)
Accrued Interest (July 1 - Dec. 31)
Amount Consideration
Less: Accrued Interest
Carrying Amount, July 1, 2021

12% 10%
Date Nominal Rate Effective Rate Amortization
1/1/2023
### ₱6,000 ₱9,400 ₱3,400

Related Journal Entries:

Date Account Particulars Debit
7/1/2021 Cash ₱100,000
Interest Payable ₱6,000
Premium on Bonds Payable
Bonds Payable
To record issuance of bonds.
### Interest Expense ₱9,400
Premium on Bonds Payable ₱3,400
Cash
To record interest paid and amortization of bond premium
 PV Factor Present Value
0.9434 ₱283,020
0.8900 ₱255,875
0.8396 ₱230,890
0.7921 ₱207,926
₱977,711.25
₱1,000,000
-₱22,288.75

on Table

Principal PaymeCarrying Amount

₱977,711.25
₱250,000 ₱1,236,373.93
₱250,000 -
₱250,000 -
₱250,000 -
₱1,000,000

Credit

₱1,000,000

₱8,663
₱300,000
of principal plus interest and amortization of discount.

₱100,000
12%
₱12,000
0.50
₱6,000
 ₱100,000
₱6,000
₱94,000

Carrying Amount
₱94,000
₱97,400

Credit

₱6,000
₱100,000

₱12,800
paid and amortization of bond premium.