On January 1, 20x1, Sina Co. acquired 10%, ₱4,000,000 bonds for ₱3,807,853. The principal is due on January 1, 20x4 but interest is due annually. The yield rate on the bonds is 12%. How much is the interest income recognized in 20x1?456,942 463,776 c. 471,429 d. 400,000 How much is the carrying amount of the investment on December 31, 20x1?3,807,853 3,864,795 c. 3,928,571 d. 4,000,000 On May 1, 20x1, Shinuka Co. acquired ₱100,000 face amount, 10% bonds dated January 1, 20x1 at 102. The purchase price excludes interest. How much is the initial carrying amount of the investment?102,000 99,500 c. 98,667 d. 105,333

In this question amount of coupon is to be find out. It can be find out by multiplying the coupon…

Answered: On January 1, 20x1, Sina Co. acquired…

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 5E

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On January 1, 20x1, Sina Co. acquired 10%, ₱4,000,000 bonds for ₱3,807,853. The principal is due on January 1, 20x4 but interest is due annually. The yield rate on the bonds is 12%.

How much is the interest income recognized in 20x1?
1. 456,942 463,776 c. 471,429 d. 400,000

How much is the carrying amount of the investment on December 31, 20x1?
1. 3,807,853 3,864,795 c. 3,928,571 d. 4,000,000

On May 1, 20x1, Shinuka Co. acquired ₱100,000 face amount, 10% bonds dated January 1, 20x1 at 102. The purchase price excludes interest. How much is the initial carrying amount of the investment?
1. 102,000 99,500 c. 98,667 d. 105,333

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