ABC Corporation acquired a call option for 5,000 pieces of P1,000-face value bonds of XYZ Corp. at a strike of 99 on a later date. ABC paid a premium of P47,000. On the exercise day of the option, the bonds were selling fast 98. How much is net gain/(loss) from the above transactions?

ABC Corporation acquired a call option for 5,000 pieces of P1,000-face value bonds of XYZ Corp. at a strike of 99 on a later date. ABC paid a premium of P47,000. On the exercise day of the option, the bonds were selling fast 98. How much is net gain/(loss) from the above transactions?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 18MC: OShea Inc. issued bonds at a face value of $100,000, a rate of 6%, and a 5-year term for $98,000....

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