PLEASE ANSWER ALL OF THIS QUESTION ASAP!!! Problem 21-6 (IFRS - From FVPL to FVOCI)On January 1, 2022, Delta Company purchased 6% bondswith face amount of P4,000,000.The bonds mature on January 1, 2027 and werefor P3,530,000 to yield 9%.The entity classified the bonds as held for trading and interestis payable annually every December 31.December 31, 2022December 31, 2023purchasedFair value3,490,0003,425,000Effective rate10%12%On December 31, 2022, the entity changed the business modelto collect contractual cash flows and also to sell the bonds inthe open market.On January 1, 2023, the fair value of the bonds did not change.Required:1. What amount should be reported as interest income for2022?2. What amount of unrealized loss should be reported inthe income statement for 2022?3. What amount should be reported as interest income for2023?4. What amount of unrealized loss should be recognized inother comprehensive income for 2023?5. Prepare journal entries for 2022 and 2023.

(Note: Only 4 sub parts have been answered) As per information provided: Delta company purchased…

1. What amount should be reported as interest income for 2022? 2. What amount of unrealized loss should be reported in the income statement for 2022? 3. What amount should be reported as interest income for 2023?

1. What amount should be reported as interest income for 2022? 2. What amount of unrealized loss should be reported in the income statement for 2022? 3. What amount should be reported as interest income for 2023?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter9: Long-term Liabilities

Section: Chapter Questions

Problem 54BE

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Question

PLEASE ANSWER ALL OF THIS QUESTION ASAP!!!

Problem 21-6 (IFRS - From FVPL to FVOCI)
On January 1, 2022, Delta Company purchased 6% bonds
with face amount of P4,000,000.
The bonds mature on January 1, 2027 and were
for P3,530,000 to yield 9%.
The entity classified the bonds as held for trading and interest
is payable annually every December 31.
December 31, 2022
December 31, 2023
purchased
Fair value
3,490,000
3,425,000
Effective rate
10%
12%
On December 31, 2022, the entity changed the business model
to collect contractual cash flows and also to sell the bonds in
the open market.
On January 1, 2023, the fair value of the bonds did not change.
Required:
1. What amount should be reported as interest income for
2022?
2. What amount of unrealized loss should be reported in
the income statement for 2022?
3. What amount should be reported as interest income for
2023?
4. What amount of unrealized loss should be recognized in
other comprehensive income for 2023?
5. Prepare journal entries for 2022 and 2023.

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