question archive On January 31, 2018, Beau Company issued P3,000,000 maturity value, 12% bonds for P3,000,000 cash
On January 31, 2018, Beau Company issued P3,000,000 maturity value, 12% bonds for P3,000,000 cash
Subject:AccountingPrice:2.87 Bought7
On January 31, 2018, Beau Company issued P3,000,000 maturity value, 12% bonds for P3,000,000 cash. The bonds are dated December 31, 2017 and mature on December 31, 2027. Interest is payable semiannually on June 30 and December 31.
What amount of accrued interest payable should be reported on September 30, 2018?
a. 270,000
b. 240,000
c. 180,000
d. 90,000
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
Answer:
d .
Step-by-Step explanation
Amount of accrued interest payable should be reported on September 30, 2018 :
Interest upto June 2018 has been paid.
Amount of interest from July to September is outstanding which is calculated as follows:
July to September(3 months).
Now,
Accrued interest= Bond value * Rate *Time period
= 3000000*12%*3/12
= 3000000*(12/100)*(3/12)
= 3000000*(0.12)*(0.25)
= 90,000
Hence, amount of accrued interest payable =90,000. That is, option (d).
