On January 1, 2020, RED Company purchased 12% bonds with face amount of P5,000,000 for P5,500,000 which included a transaction cost of P100,000. The bonds provide an effective yield of 10%. The bonds are dated January i, 2020, mature on January 1, 2025 and pay interest annually on December 31 of each year. The bonds are quoted at 115 on December 31, 2020. The entity irrevocably elected to use the fair value option. What amount of interest income should be reported for 2020? P 550,000 P 600,000 P 660,000 P 540,000
On January 1, 2020, RED Company purchased 12% bonds with face amount of P5,000,000 for P5,500,000 which included a transaction cost of P100,000. The bonds provide an effective yield of 10%. The bonds are dated January i, 2020, mature on January 1, 2025 and pay interest annually on December 31 of each year. The bonds are quoted at 115 on December 31, 2020. The entity irrevocably elected to use the fair value option. What amount of interest income should be reported for 2020? P 550,000 P 600,000 P 660,000 P 540,000
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 1RE
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