On January 1, 2021, STUDY HARDER Company purchased 9% bonds with face amount of P6,000,000. The bonds mature on January 1, 2026 and were purchased for P5,550,000 to yield 11%. The entity classified the bonds as held for trading and interest is payable annually every December 31. The entity provided the following information about fair value of the bonds and effective rate: Fair Value December 31, 2021 December 31, 2022 5,450,000 6.150,000 Effective Rate 12% 8% On December 31, 2022, the entity changed the business model for this investment to collect contractual cash flows composed of principal and interest. On January 1, 2023, the fair value of the bonds did not change At the reclassification date how much is the premium or disCount?
On January 1, 2021, STUDY HARDER Company purchased 9% bonds with face amount of P6,000,000. The bonds mature on January 1, 2026 and were purchased for P5,550,000 to yield 11%. The entity classified the bonds as held for trading and interest is payable annually every December 31. The entity provided the following information about fair value of the bonds and effective rate: Fair Value December 31, 2021 December 31, 2022 5,450,000 6.150,000 Effective Rate 12% 8% On December 31, 2022, the entity changed the business model for this investment to collect contractual cash flows composed of principal and interest. On January 1, 2023, the fair value of the bonds did not change At the reclassification date how much is the premium or disCount?
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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