The following investment account was taken from the general ledger of One Dream Investment Company: Debt Investments - Fulfilled Dream 6% bonds (2,000,000 face value, due December 31, 2027)DatePRDebitCreditBalanceJanuary 2, 2022VRP1,812,300 P1,812,300June 30, 2022CRJ 60,0001,752,300Dec. 31, 2022CRJ 60,0001,692,300Dec. 31, 2022 195,0001,497,300 In the course of your examination, you obtained the following information:Interest checks were received on June 30 and December 31 and were credited to the investment account.One dream sold P200,000 of its investment on December 31, 2022 for P195,000.Effective interest rate on this investment, as computed by your audit staff, is 8%.One Dream included this investment in a portfolio that is held to collect and for sale.The fair value at December 31, 2022 and 2023 is 97.5 and 105, respectively. Question 1: The entry to correct the interest income for 2022 includes a debit to the investment account of how much?Question 2: How much is the amortization for 2023?Question 3: how much is the gain or loss on sale as of December 31, 2022?Question 4: The unrealized gain or loss for the year 2023 amounts to?

Question 1 Debit to the investment account by P120000 (P60000 due on June 30,2022 and P60000 due on…

Answered: The following investment account was…

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 4E

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The following investment account was taken from the general ledger of One Dream Investment Company:

Debt Investments - Fulfilled Dream 6% bonds (2,000,000 face value, due December 31, 2027)

Date	PR	Debit	Credit	Balance
January 2, 2022	VR	P1,812,300		P1,812,300
June 30, 2022	CRJ		60,000	1,752,300
Dec. 31, 2022	CRJ		60,000	1,692,300
Dec. 31, 2022			195,000	1,497,300

In the course of your examination, you obtained the following information:

Interest checks were received on June 30 and December 31 and were credited to the investment account.
One dream sold P200,000 of its investment on December 31, 2022 for P195,000.
Effective interest rate on this investment, as computed by your audit staff, is 8%.
One Dream included this investment in a portfolio that is held to collect and for sale.
The fair value at December 31, 2022 and 2023 is 97.5 and 105, respectively.

Question 1: The entry to correct the interest income for 2022 includes a debit to the investment account of how much?

Question 2: How much is the amortization for 2023?

Question 3: how much is the gain or loss on sale as of December 31, 2022?

Question 4: The unrealized gain or loss for the year 2023 amounts to?

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