QUIZ- INTEGRATED ACCOUNTING PROBLEMS 1

1.

The following accounts are reproduced from the ledger of Anya Company on December 31, 2012.
12 % Bonds Payable- Due January 1, 2015

Discount on Bonds Payable

Required:
A.
B.
C.
2.

Balance of bonds payable and discount on bonds payable on December 31, 2012. The straight line
method of amortization is used.
Computation of bonds interest expense for the year ended December 31, 2012. Interest is payable
semiannually on January 1 and July 1.
Adjusting journal entries on December 31, 2012.

White Company issued P8,000,000 12% bonds on December 31, 2012 at 96. Interest is payable annually
on December 31. The bonds mature as follows:
December 31
2014
2015
2016
2017
2018
2019

1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000

Required:
A. Prepare all journal entries from 2012-2015. Use the bond outstanding method of amortizing discount
or premium.
3.

On December 31, 2012, Dome Company issued P4,000,000, 8% serial bonds, to be repaid in the amount
of P800,000 each year. Interest is payable annually on December 31. The bonds were issued to yield 10%
a year.
Required:
A. Determine the carrying amount of the bonds payable on December 31, 2013. The entity is using the
interest method of amortizing the bond discount.
B. Prepare the journal entries for 2013.

4.

On January 1, 2012, Taguig Company issued 3-year bonds with face value of P5,000,000 at 99. The
nominal is 10% and the interest is payable annually on December 31. Taguig Company paid bond issue
cost of P150,000.
Required:
A. Prepare the journal entries for 2012. Use the effective interest method of amortizing bond discount.