Pedro Co purchased a bond investment in Juan Company. The following are the data pertaining to Pedro's Investments in Debt Security. Date of purchase: January 1, 2021 Purchase price: P4,200,000 Principal amount: P4,000,000 Cash interest: 5% per annum, payable on December 31 Effective interest: 3.8806% per annum Maturity date: December 31, 2025 Fair value of the bond: December 31, 2021 at 3% rate P4,297,368 December 31, 2022 at 3.5% rate P4,168,098 December 31, 2023 at 4% rate P4,075,444 December 31, 2024 at 4.5% rate P4,019,139 If initially the investment is accounted for as Amortized Cost for two years and then shifted it to FVOCI method, what amount of income recognized in Profit or loss in 2023?
Pedro Co purchased a bond investment in Juan Company. The following are the data pertaining to Pedro's Investments in Debt Security. Date of purchase: January 1, 2021 Purchase price: P4,200,000 Principal amount: P4,000,000 Cash interest: 5% per annum, payable on December 31 Effective interest: 3.8806% per annum Maturity date: December 31, 2025 Fair value of the bond: December 31, 2021 at 3% rate P4,297,368 December 31, 2022 at 3.5% rate P4,168,098 December 31, 2023 at 4% rate P4,075,444 December 31, 2024 at 4.5% rate P4,019,139 If initially the investment is accounted for as Amortized Cost for two years and then shifted it to FVOCI method, what amount of income recognized in Profit or loss in 2023?
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 2MC: During 2021, Anthony Company purchased debt securities as a long-term investment and classified them...
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