BA 99.

2: Fundemantal Accounting Theory and Practice II

2nd Semester, AY 2023-2024
Module 2: Non-Current Liabilities (Quiz) - Solutions: TTh

I. MULTIPLE CHOICE
1 B 6 D
2 C 7 B
3 A 8 A
4 C 9 A
5 A 10 B

II. PROBLEM SOLVING

₱1,096,035.31 1 Issuance date 1/1/23
₱302,973.52 2 Maturity date 1/1/27
₱1,399,008.83 3 Term in years 4
Interest date June 30, December 31
# of compounding 2 8
Face amount 1,500,000.00
Nominal rate 6%
Effective rate 8% 4%

PV of 1 0.7307 0.7307
PV of OA of 1 6.7327 6.7327

Principal 1,500,000.00
PV of principal 1,096,035.31
Interest 45,000.00
PV of interest 302,973.52
Fair value 1,399,008.83

₱360,000.00 4 Issuance date 6/30/20 Amortization Table:

Premium ₱37,875.60 5 Maturity date 06/30/23 Date Interest Pay. Interest Exp. Prem. Amort. Carrying Amo.
₱280,840.00 6 Term in years 3 6/30/20 3,227,816.52
Premium ₱41,284.40 7 Interest date June 30 6/30/21 360,000.00 290,503.49 69,496.51 3,158,320.01
# of compounding 1 3 6/30/22 360,000.00 284,248.80 75,751.20 3,082,568.81
Face amount 3,000,000.00 6/30/23 360,000.00 277,431.19 82,568.81 3,000,000.00
Nominal rate 12%
Effective rate 9% 9%

PV of 1 0.7722 0.7722
PV of OA of 1 2.5313 2.5313

Principal 3,000,000.00
PV of principal 2,316,550.44
 Interest 360,000.00
PV of interest 911,266.08
Fair value 3,227,816.52

₱1,419,809.64 ₱1,419,809.64 8 Issuance date 1/1/23 Amortization Table:

Loss ₱66,114.22 9 Maturity date 1/1/26 Date Interest Pay. Interest Exp. Disc. Amort. Carrying Amo.
₱577,999.29 10 Term in years 3 1/1/23 1,352,480.27
Interest date June 30, December 31 6/30/23 60,000.00 81,148.82 21,148.82 1,373,629.09
# of compounding 2 6 12/31/23 60,000.00 82,417.75 22,417.75 1,396,046.83
Face amount 1,500,000.00 6/30/24 60,000.00 83,762.81 23,762.81 1,419,809.64
Nominal rate 8% 12/31/24 60,000.00 85,188.58 25,188.58 1,444,998.22
Effective rate (new) 12% 6% 6/30/25 60,000.00 86,699.89 26,699.89 1,471,698.11
12/31/25 60,000.00 88,301.89 28,301.89 1,500,000.00
PV of 1 0.7050 0.7050
PV of OA of 1 4.9173 4.9173

Principal 1,500,000.00
PV of principal 1,057,440.81
Interest 60,000.00
PV of interest 295,039.46
Fair value 1,352,480.27

Bonds retired 900,000.00

Retirement price 918,000.00
Carrying amount - ret. 851,885.78
Loss on retirement 66,114.22

Bonds remaining 600,000.00

Carrying amount, 6/30/24 567,923.86
CA, 12/31/24 577,999.29
577,999.29