On July 1, 2019, SIMP Company purchased P500,00 face value DRIP Company 8% bonds for P455,000 plus accrued interest to yield 10%. the bonds were designated as at fair value through profit or loss. The bonds mature on January 1, 2023 and pay interest annually on January 1. On December 31, 2019, the bonds had a market value of 472,500. On February 14, 2020. Catto sold the bonds for 450,000 plus accrued interest.
On July 1, 2019, SIMP Company purchased P500,00 face value DRIP Company 8% bonds for P455,000 plus accrued interest to yield 10%. the bonds were designated as at fair value through profit or loss. The bonds mature on January 1, 2023 and pay interest annually on January 1. On December 31, 2019, the bonds had a market value of 472,500. On February 14, 2020. Catto sold the bonds for 450,000 plus accrued interest.
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 July 1, 2019, SIMP Company purchased P500,00 face value DRIP Company 8% bonds for P455,000 plus accrued interest to yield 10%. the bonds were designated as at fair value through profit or loss. The bonds mature on January 1, 2023 and pay interest annually on January 1. On December 31, 2019, the bonds had a market value of 472,500. On February 14, 2020. Catto sold the bonds for 450,000 plus accrued interest.
What is the gain (loss) on the sale of the securities in 2020?
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