question archive P Co purchased a bond investment in Z Ltd

P Co purchased a bond investment in Z Ltd

Subject:AccountingPrice:3.86 Bought12

P Co purchased a bond investment in Z Ltd. P's business model is to hold the investment to collect contractual cash flows and to sell when funds are needed for expansion of FVOCI.

Date of purchase: January 1, 2021

Purchase price: P4,200,000

Principal amount: P4,000,000

Cash interest: 5% per annum, payable on December 31

Effective interest: 3.8806% per annum

Maturity date: December 31, 2025

Fair value of the bond:

 December 31, 2021 P4,894,000

 December 31, 2022 P4,560,000

The bond was sold on December 31, 2022 at its fair value.

What amount will be recorded as income in the Profit or loss in 2021?

Option 1

Low Cost Option
Download this past answer in few clicks

3.86 USD


Option 2

Custom new solution created by our subject matter experts


rated 5 stars

Purchased 12 times

Completion Status 100%

Related Questions