On January 1, 2020, HIBISCUS Company purchased 4,000 of ₱1,000 face value, 10% bonds of IXORA Company for ₱4,270,600. The bonds will mature on January 1, 2025 and pay interest semi-annually on January 1 and July 1. Bonds effective interest rate is 8%. HIBISCUS has a business model of collecting all the contractural cash flows related to the instrument. How much should HIBISCUS report as interest income on the bonds?
On January 1, 2020, HIBISCUS Company purchased 4,000 of ₱1,000 face value, 10% bonds of IXORA Company for ₱4,270,600. The bonds will mature on January 1, 2025 and pay interest semi-annually on January 1 and July 1. Bonds effective interest rate is 8%. HIBISCUS has a business model of collecting all the contractural cash flows related to the instrument. How much should HIBISCUS report as interest income on the bonds?
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 3MC: On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9%...
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On January 1, 2020, HIBISCUS Company purchased 4,000 of ₱1,000 face
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