On January 1, 20x1, ABC Co. purchased ₱1,000,000 bonds at a price which reflects a yield rate of 14%. The bonds mature on January 1, 20x4 and pay 12% annual interest beginning January 1, 20x2. Transaction costs incurred on the acquisition amounted to ₱12,000. The bonds are classified as held for trading securities. On December 31, 20x1, the bonds are selling at a yield rate of 10%. How much is the unrealized gain (loss) on change in fair value recognized in ABC’s 20x1 profit or loss?
On January 1, 20x1, ABC Co. purchased ₱1,000,000 bonds at a price which reflects a yield rate of 14%. The bonds mature on January 1, 20x4 and pay 12% annual interest beginning January 1, 20x2. Transaction costs incurred on the acquisition amounted to ₱12,000. The bonds are classified as held for trading securities. On December 31, 20x1, the bonds are selling at a yield rate of 10%. How much is the unrealized gain (loss) on change in fair value recognized in ABC’s 20x1 profit or loss?
Chapter13: Long-term Liabilities
Section: Chapter Questions
Problem 2PA: On July 1, Somerset Inc. issued $200,000 of 10%, 10-year bonds when the market rate was 12%. The...
Related questions
Question
On January 1, 20x1, ABC Co. purchased ₱1,000,000 bonds at a price which reflects a yield rate of
14%. The bonds mature on January 1, 20x4 and pay 12% annual interest beginning January 1, 20x2. Transaction costs incurred on the acquisition amounted to ₱12,000. The bonds are classified as held
for trading securities. On December 31, 20x1, the bonds are selling at a yield rate of 10%. How much
is the unrealized gain (loss) on change in fair value recognized in ABC’s 20x1 profit or loss?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Cornerstones of Financial Accounting
Accounting
ISBN:
9781337690881
Author:
Jay Rich, Jeff Jones
Publisher:
Cengage Learning
Financial Accounting
Accounting
ISBN:
9781305088436
Author:
Carl Warren, Jim Reeve, Jonathan Duchac
Publisher:
Cengage Learning
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:
9781337788281
Author:
James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:
Cengage Learning
Financial Reporting, Financial Statement Analysis…
Finance
ISBN:
9781285190907
Author:
James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:
Cengage Learning