Problem 6-4 (ACP) * Clan Company issued 3-year 12% bonds with face amount of . P2,000,000. Interest is payable semiannually April 1 and October 1. The bonds were issued on April 1, 2020 for P2,101,520 which - represents an effective interest cost of 10% per year. Required: 1. Prepare an amortization table using the effective interest method. 2. Prepare journal entries for 2020 and 2021.Problem 6-8 (IAA) On January 1, 2020, Mania Company issued 12% bonds dated January 1, 2020 with face amount of P20,000,000. The bonds mature on December 31, 2029. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. The PV of 1 at 5% for 20 periods is 0.377 and the PV of an ordinary annuity of 1 for 20 periods is 12.46. Required: 1. Determine the price of the bonds at January 1, 2020. 2. Prepare the journal entry to record the bond issuance on January 1, 2020. - 8. Prepare the journal entry to record interest expense on June 30, 2020 using the effective interest method. 4. Prepare the journal entry to record interest expense on December 31, 2020 using the effective interest method.Problem 6-12 (IAA) On January 1, 2020, Katrina Company issued at par 5,000, 10% bonds with a face amount of P1,000 per bond. The bonds have a five-year term, and pay interest annually every December 31 of each year. The entity elected the fair value option in measuring the bonds payable, On December 31, 2020 and 2021, the risk factors indicated that the rate of interest applicable to the borrowings was 8% and 12% respectively. PV of 18% 4 periods 0.735 PV of an ordinary annuity of 1 8% 4 periods 3.312 PV of 112% 3 periods 0.712 PV of an ordinary annuity of 1 12% 3 periods 2.404 Required: Prepare journal entries for 2020 and 2021.Problem 7-1 (IAA) At the beginning of current year, Monic Company decided to issue 5,000 10-year bonds of 8% P1,000 face amount each with ants to acquire share capital at P30 per share. The interest on|the bonds is payable annually every December 31. Each bond contains one warrant which can be used to acquire 4 shares of P25 par value share capital. It is reliably determined that without warrants, the bonds would sell at 114.7 with a 6% effective yield. The bond price with warrants is 120. All warrants are exercised at year-end. : Required: Prepare journal entries for the current year in connection with the bond issuance and the exercise of the warrants. Use effective interest method of amortization.Problem 7-5 (IAA) Sunshine Company issued 4-year 12% convertible bonds with face amount of P5,000,000 at 105 on January 1, 2020 maturing on January 1, 2025 and paying interest annually on December 31. It is reliably ascertained that the bonds would sell at P4,700,000 without the conversion feature with an effective yield of 14%. Each P1,000 bond is convertible into 8 shares of P100 par value share capital. On December 31, 2020, all of the bonds are converted into share capital. At this time, the share has a market value of P150 and the bonds are quoted at 101. Required: 1. Prepare journal entry to record the issuance of the bonds on January 1, 2020. 2. Prepare journal entry to record the interest payment and amortization for 2020. The effective interest method of amortization is used. 8. Prepare journal entry to record the conversion of bonds on December 31, 2020.Problem 7-7 (IAA) un January 1, 2020, Andrea Company issued 4,000 convertible bonds with P1,000 face amount per bond. The bonds have a three-year life and are issued at 105 or a total proceeds of P4,200,000., Interest is payable annually at 6% every December 31. Each : bond is convertible into 20 ordinary shares with P50 par value. When the bonds are issued, the market rate of interest for similar bonds without conversion option is 8%. The PV of 1 at 8% for three periods is .79, and the PV of an ordinary annuity of 1 at 8% for three periods is 2.58. Required: 1. Prepare journal entry to record the original issuance of the convertible bonds. 2. Prepare journal entry to record the full payment of the convertible bonds at maturity on January 1, 2023.