On January 1, Year 1, Tina Company purchased bonds with face value of P4,000,000 for P4,206,000. The business model in managing the financial asset is to collect contractual cash flows that are solely payments of principal and interest and also to sell the bonds in the open market. The bonds mature on December 31, Year 3, and pay 10% interest annual on December 31 each year with 8% effective yield rate. The bonds are quoted at 95 on December 31, Year 1 and 90 on December 31, Year 2. What amount of unrealized loss should be reported as component of other comprehensive income in Year 1? 342,480 406,000 469,520 None of the above
On January 1, Year 1, Tina Company purchased bonds with face value of P4,000,000 for P4,206,000. The business model in managing the financial asset is to collect contractual cash flows that are solely payments of principal and interest and also to sell the bonds in the open market. The bonds mature on December 31, Year 3, and pay 10% interest annual on December 31 each year with 8% effective yield rate. The bonds are quoted at 95 on December 31, Year 1 and 90 on December 31, Year 2. What amount of unrealized loss should be reported as component of other comprehensive income in Year 1? 342,480 406,000 469,520 None of the above
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter9: Long-term Liabilities
Section: Chapter Questions
Problem 7MCQ
Related questions
Question
On January 1, Year 1, Tina Company purchased bonds with face value of P4,000,000 for P4,206,000. The business model in managing the financial asset is to collect contractual cash flows that are solely payments of principal and interest and also to sell the bonds in the open market. The bonds mature on December 31, Year 3, and pay 10% interest annual on December 31 each year with 8% effective yield rate. The bonds are quoted at 95 on December 31, Year 1 and 90 on December 31, Year 2.
What amount of unrealized loss should be reported as component of other comprehensive income in Year 1?
What amount of unrealized loss should be reported as component of other comprehensive income in Year 1?
342,480
406,000
469,520
None of the above
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 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, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
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
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
Principles of Accounting Volume 1
Accounting
ISBN:
9781947172685
Author:
OpenStax
Publisher:
OpenStax College
Excel Applications for Accounting Principles
Accounting
ISBN:
9781111581565
Author:
Gaylord N. Smith
Publisher:
Cengage Learning