On January 1, 2018, LAB Co. acquired P4,000,000 of 12% face value bonds at P3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019 : 98 June 30, 2020 : 99 How much will be recognized as income on the 2018 income statement? * P432,620 P452,040 P480,000 P527,380 P560,000
On January 1, 2018, LAB Co. acquired P4,000,000 of 12% face value bonds at P3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019 : 98 June 30, 2020 : 99 How much will be recognized as income on the 2018 income statement? * P432,620 P452,040 P480,000 P527,380 P560,000
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 1MC
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On January 1, 2018, LAB Co. acquired P4,000,000 of 12% face value bonds at P3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019 : 98 June 30, 2020 : 99 How much will be recognized as income on the 2018 income statement? *
P432,620
P452,040
P480,000
P527,380
P560,000
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