Nolasco, Leah Mae G.

BSA - 2

1. B. 318,960
Solutions:
Interest Expense from January 1 to June 30,2020
(5,316,000 x 12% x 6/12) P318,960

2. D. 15,200
Interest Expense (3,504,000 x 10% x 6/12) 175,200
Interest paid (4,000,000 x 8% x 6/12) 160,000
Discount amortization for six months P 15,200

3. A. 228,400
Solutions:
Interest Expense (10% x 3,756,000) 375,600
Interest paid (9% x 4,000,000) 360,000
Discount amortization 15,600

Discount on bonds payable 244,000

Less: Amortization for 2020 15,600
Balance - December 31,2020 228,400 #3

4. C. 3,771,600
Solutions:
4,000,000 - 228,400 3,771,600

5. C. 215,000
Solutions:
Interest Expense (5,250,000 x 6%) 315,000
Interest paid (5,000,000 x 10%) 350,000
Premium amortization for 2020 35,000

Premium on bonds payable, January 1,2020 250,000

Less: Premium amortization for 2020 35,000
Balance - December 31, 2020 215,000 #5

6. C. 5,215,000
Solutions:
5,000,000 + 215,000 5,215,000

7. B. 469,500
Solutions:
Interest Expense (12% x 4,760,000) 469,500 #7
Interest paid (5,000,000 x 9%) 450,000
Amortization of discount for 2020 19,500

8. C. 4,714,500
Solutions:
Bonds payable 5,000,000
Discount on bonds payable (305,000 - 19,500) 285,500
Carrying amount 4,714,500

9. B. 4,831,200
Issue price (5,000,000 x 98) 4,900,000

Bonds payable 5,000,000

Discount on bonds payable ( 100,000)
Bond issue cost ( 140,000)
Carrying amount 4,760,000

Interest expense (12% x 4,760,000) 571,200

 Interest paid (10% x 5,000,000) 500,000
Amortization of discount and issue cost 71,200

Bonds payable 5,000,000

Bond discount and issue cost (240,000 - 71,200) ( 168,000)
Carrying Amount - 12/312020 4,831,200 #9

10. C. 5,345,200
Solutions:
Issue price (5,000,000 x 110) 5,500,000

Bonds payable 5,000,000

Premium on bonds payable 500,000
Bond issue cost ( 80,000)
Carrying amount 5,420,000

Interest Expense (6% x 5,420,000) 325,200

Interest paid (8% x 5,000,000) 400,000
Amortization of discount and issue cost 74,800

Bonds payable 5,000,000

Premium on bonds payable (420,000 - 74,800) 345,200
Carrying amount - 12/31/2020 5,345,200 #10