On October 1, 2021, Valorant Company purchased a debt security having a face value of P3,000,000 with an interest rate of 10% for P3,200,000 including the accrued interest. A total of P50,000 was incurred and paid by Genshin Company which is in relation to the acquisition of the debt instrument. Valorant Company has a business model for fair value through other comprehensive income. The bonds mature on January 1, 2026 and pay interest semi-annually on January 1 and July 1. On December 31, 2021, the bonds had a market value of P3,400,000. What amount should the investment be initially recorded? A.P3,175,000
On October 1, 2021, Valorant Company purchased a debt security having a face value of P3,000,000 with an interest rate of 10% for P3,200,000 including the accrued interest. A total of P50,000 was incurred and paid by Genshin Company which is in relation to the acquisition of the debt instrument. Valorant Company has a business model for fair value through other comprehensive income. The bonds mature on January 1, 2026 and pay interest semi-annually on January 1 and July 1. On December 31, 2021, the bonds had a market value of P3,400,000. What amount should the investment be initially recorded? A.P3,175,000
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 1E: Parilo Company acquired 170,000 of Makofske Co., 5% bonds on May 1, 2016, at their face amount....
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On October 1, 2021, Valorant Company purchased a debt security having a face value of P3,000,000 with an interest rate of 10% for P3,200,000 including the accrued interest. A total of P50,000 was incurred and paid by Genshin Company which is in relation to the acquisition of the debt instrument. Valorant Company has a business model for fair value through other comprehensive income. The bonds mature on January 1, 2026 and pay interest semi-annually on January 1 and July 1. On December 31, 2021, the bonds had a market value of P3,400,000. What amount should the investment be initially recorded?
A.P3,175,000
B.P3,200,000
C.P3,250,000
D.P3,125,000
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