Professional Documents
Culture Documents
obtain the following evidence and data relative to your examination of the bonds payable and
related accounts.
The December 31, 2024 balance of P9,500,000 represents proceeds from issuance of 10,000
bonds of P1,000 each on November 2, 2023. Interest at 12% per annum is due semiannually every
May 1 and November 1.
Interest Expense
5/01/2025 CV-120 P400,000 07/01/2025 CR P40,000
11/01/2025 CV-531 720,000
CR Cash receipts entry for issuance of 2,000 bonds for a total of P2,100,000 on July 1, 2025.
Trustee’s remittance statement attached:
Entry recorded:
Cash P2,140,000
Bonds Payable P2,100,000
Interest expense 40,000
CV-120 Cash payment to trustee for December 31, 2024 through April 30, 2025 interest. Paid check
to trustee attached.
CV-531 Cash payment to trustee for May 1, 2025 through October 31, 2025 interest. Paid check to
trustee attached.
The client uses straight line method of amortization bond discount and premium.
REQUIRED:
1.Compute for the adjusted balances of the following as of December 31, 2025:
a. Bond Discount
b. Bond Premium
c. Bonds Payable
d. Accrued Interest Payable
e. Interest Expense for the year