On May 1, 2019, LAG Co. purchased a short-term P2,000,000 face value, 9% debt instruments for P1,860,000 including the accrued interest and classified it as a trading security. The debt instruments mature on January 1, 2022, and pay interest semi-annually on January 1 and July 1. On December 31, 2019, the fair market value of the instruments is 98%. On March 2, 2020, LAG Co. sold the trading security for P1,980,000. 31. How much will be recognized as gain (loss) on sale of trading security on 2020 income statement? a. (P10,000) b. P20,000 c. P120,000 d. P150,000

On May 1, 2019, LAG Co. purchased a short-term P2,000,000 face value, 9% debt instruments for P1,860,000 including the accrued interest and classified it as a trading security. The debt instruments mature on January 1, 2022, and pay interest semi-annually on January 1 and July 1. On December 31, 2019, the fair market value of the instruments is 98%. On March 2, 2020, LAG Co. sold the trading security for P1,980,000. 31. How much will be recognized as gain (loss) on sale of trading security on 2020 income statement? a. (P10,000) b. P20,000 c. P120,000 d. P150,000

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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