On January 1, 2019, Ron Company purchased 12% bonds with face amount of P5,000,000 for P5,380,000 with an effective yield of 10%. The bonds are dated January 1, 2019, mature on January 1, 2024 and pay interest annually on December 31 of each year. The bonds are quoted at 120 on December 31, 2019. The entity has elected the fair value option for the bond investment. What total income should be reported for 2019? a. 1,220,000 b. 1,120,000 C. 1,138,000 d. 600,000

On January 1, 2019, Ron Company purchased 12% bonds with face amount of P5,000,000 for P5,380,000 with an effective yield of 10%. The bonds are dated January 1, 2019, mature on January 1, 2024 and pay interest annually on December 31 of each year. The bonds are quoted at 120 on December 31, 2019. The entity has elected the fair value option for the bond investment. What total income should be reported for 2019? a. 1,220,000 b. 1,120,000 C. 1,138,000 d. 600,000

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

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1MC

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