Yellow Company received permission on January 1, 2020 to issue 12% bonds with face amount ofP 6,000,000 maturing on January 1, 2030. Interest is payable annually on December 31. The bonds arecallable...

Yellow Company received permission on January 1, 2020 to issue 12% bonds with face amount ofP 6,000,000 maturing on January 1, 2030. Interest is payable annually on December 31. The bonds arecallable at 102 plus accrued interest. On January 1, 2020 the entity issued the bonds for P 6,737,000 withan effective yield of 10%. The fiscal year of the entity ends December 31. The effective interestamortization is used.Required:1. Prepare journal entries relating to the bonds payable for 2020.2. Present the bonds payable on December 31, 2020