On January 1, 2019, Ondoy Company purchased $1,000,000, 12% bonds of Pepeng Company for $1,063, 394, a price that yields 10%. The bonds mature on December 31, 2022. On April 1, 2021, to pay the maturing obligation, Ondoy sold $600,000 face value bonds at 101 plus accrued interest. The market value of the bonds on December 31, 2019, 2020 and 2021, respectively are: 108, 106 and 104. If the entity classified the investment at fair value through profit or loss, how much is the bond investment on December 31, 2020?

On January 1, 2019, Ondoy Company purchased $1,000,000, 12% bonds of Pepeng Company for $1,063, 394, a price that yields 10%. The bonds mature on December 31, 2022. On April 1, 2021, to pay the maturing obligation, Ondoy sold $600,000 face value bonds at 101 plus accrued interest. The market value of the bonds on December 31, 2019, 2020 and 2021, respectively are: 108, 106 and 104. If the entity classified the investment at fair value through profit or loss, how much is the bond investment on December 31, 2020?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter14: Financing Liabilities: Bonds And Long-term Notes Payable

Section: Chapter Questions

Problem 16E

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