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On January 2, 2021, BAGITO Co. issued 8% bonds with a face amount of P 1,000,000 that mature on January 2, 2027. The bonds were issued to yield 12%, resulting in a discount of P150,000. BAGITO incorrectly used the straightline method instead of the effective interest method to amortize the discount. BAGITO does not elect the fair value option for reporting financial liabilities. How is the carrying amount of the bonds affected by the error? I. At December 31, 2021 II. At January 2, 2027 a. O

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