On January 1, 2019, LEMON Company purchased bonds with face amount of ₱6,000,000 for ₱6,309,000. The business model of the entity in managing the financial asset is to collect contractual cash flows that are solely payment of principal and interest and also to sell the bonds in the open market. The bonds mature on December 31, 2021 and pay 10% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 95 and 90 on December 31, 2019 and December 31, 2020, respectively. What amount of cumulative unrealized gain or loss should be reported in the statement of financial position on December 31, 2020?
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On January 1, 2019, LEMON Company purchased bonds with face amount of ₱6,000,000 for ₱6,309,000. The business model of the entity in managing the financial asset is to collect contractual
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- On January 1, 2018, Wawatosa Inc. issued 5-year bonds with a face value of $200,000 and a stated interest rate of 12% payable semi-annually on July 1 and January 1. The bonds were sold to yield 10%. Assuming the bonds were sold at 107.732, what is the selling price of the bonds? Were they issued at a discount or a premium?On January 1, 2019, LEMON Company purchased bonds with face amount of ₱6,000,000 for ₱6,309,000. The business model of the entity in managing the financial asset is to collect contractual cash flows that are solely payment of principal and interest and also to sell the bonds in the open market. The bonds mature on December 31, 2021 and pay 10% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 95 and 90 on December 31, 2019 and December 31, 2020, respectively. What amount of cumulative unrealized gain or loss should be reported in the statement of financial position on December 31, 2020? (If loss, put a negative sign before the numerical answer)On January 1, 2018, an entity purchased bonds with face amount of P5,000,000. The entity paid P4,500,000 plus transaction cost of P168,600. The bonds mature on December 31, 2020 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 105 on December 31, 2018 and 110 on December 31, 2019.The business model in managing the financial asset is to collect contractual cash flows that are solely payments of principal and interest and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2019, the entity changed its business model to collect only contractual cash flows. On December 31, 2020, the bonds are quoted at 115 and the market interest rate is 10%. find the following: 1. What amount of unrealized gain should be reported as component of OCI in the statement of comprehensive income for 2018? 2. What amount of unrealized gain should be reported as component of OCI in the statement of…
- On January 1, 2019, Davao de Oro Company purchased bonds with a face amount of P5,000,000. The entity paid P4,600,000 plus a transaction cost of P142,000 for the bond investment. The business model of the entity in managing the financial asset is to collect contractual cash flows that are solely payment of principal and interest and also to sell the bonds in the open market. The bonds mature on December 31, 2021 and pay 6% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2019 and 110 on December 31, 2020. The bonds are redeemed at face amount on December 31, 2021. Required: 1. Prepare an amortization table for the discount. 2. Assuming that half of the bonds were sold on July 1, 2020 with accrued interest, provide the following: A. Journal entries for the year 2020. B. Compute the gain or loss on sale from selling the bonds. C. Continue the amortization from selling date until maturity date.On January 1, 2019, Davao de Oro Company purchased bonds with a face amount of P5,000,000. The entity paid P4,600,000 plus a transaction cost of P142,000 for the bond investment. The business model of the entity in managing the financial asset is to collect contractual cash flows that are solely payment of principal and interest and also to sell the bonds in the open market. The bonds mature on December 31, 2021 and pay 6% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2019 and 110 on December 31, 2020. The bonds are redeemed at face amount on December 31, 2021. Required: 1. Assuming that half of the bonds were sold on July 1, 2020 with accrued interest, provide the following: A. Journal entries for the year 2020. B. Compute the gain or loss on sale from selling the bonds. C. Continue the amortization from selling date until maturity date.On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 forP3,649,600 in order to collect contractual cash flows that are solely payments of principal and interest.The bonds are purchased to yield 10% interest. The nominal interest rate on the bonds is 8% payableannually every December 31.On December 31, 2021, as a result of a change in the business model for managing financial assets,the entity decided to reclassify the bonds from amortized cost to fair value. On that date, the carryingamount of the bond investment is P3,744,016 after discount amortization using the effective interestmethod. The market value of the bonds on January 1, 2015, is 10%. Requirements: 1. Preparethe necessary journal entries to record the transactions using the change is from fair value to amortized cost.
- On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 forP3,649,600 in order to collect contractual cash flows that are solely payments of principal and interest.The bonds are purchased to yield 10% interest. The nominal interest rate on the bonds is 8% payableannually every December 31.On December 31, 2021, as a result of a change in the business model for managing financial assets,the entity decided to reclassify the bonds from amortized cost to fair value. On that date, the carryingamount of the bond investment is P3,744,016 after discount amortization using the effective interestmethod. The market value of the bonds on January 1, 2015, is 10%. Requirements: 1. What if, initially, the investment is classified at FVTPL, then subsequently changed it to FVTOCI, prepare the necessary journal entries to record the transactions. Assume that the bond is for 5 years on the date of acquisition.On January 1, 2017, KLM Company purchased bonds with faceamount of 5,000,000. The entity paid 4,600,000 plus transaction cost of 142,290. The bonds mature on December 31, 2019 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 106.5 on December 31, 2017 and 108 on December 31, 2018. Assume that the business model in managing financial asset is to collect contractual cash flows that are solely for payment of principal and interest and also to sell the bonds in an open market. What is the balance of unrealized gain-OCI on December 31, 2017?On January 1, 2020, Aguilar Corporation purchased bonds with a face value of P4,000,000 for P3,649,600 in order to collect contractual cash flows that are solely payments of principal and interest. The bonds are purchased to yield 10% interest. The nominal interest rate on the bonds is 8% payable annually every December 31. On December 31, 2021, as a result of a change in the business model for managing financial assets, the entity decided to reclassify the bonds from amortized cost to fair value. On that date, the carrying amount of the bond investment is P3,744,016 after discount amortization using the effective interest method. The market value of the bonds on January 1, 2015, is 10%. Requirements: Prepare the necessary journal entries to record the Using the same information, except that the change is from fair value to amortized cost, prepare the necessary journal entries to record the What if, initially, the investment is classified at FVTPL, then subsequently changed it to…
- On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid P4,500,000 plus transaction costs of P168,600. The bonds mature on December 31, 2022 and pay 6% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2019 and 110 on December 31, 2020. The business model in managing the financial asset is to collect contractual cash flows and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2020, the entity changed the business model to collect only contractual cash flows. On December 31, 2021, the bonds are quoted at 115 and the market rate of interest is 10%. What mount of cumulative unrealized gain should be reported as component of OCI in the statement of changes in equity for 2020?On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid P4,500,000 plus transaction costs of P168,600. The bonds mature on December 31, 2022 and pay 6% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2019 and 110 on December 31, 2020. The business model in managing the financial asset is to collect contractual cash flows and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2020, the entity changed the business model to collect only contractual cash flows. On December 31, 2021, the bonds are quoted at 115 and the market rate of interest is 10%.what amount should be reported as interest income for 2021?On January 1, 2019, ZZZ Company purchased bonds with face amount of P5,000000. The entity paid P4,500,000 plus transaction costs of P168,600. The bonds mature on December 31, 2022 and pay 6% interest annually on December 31 each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2019 and 110 on December 31, 2020. The business model in managing the financial asset is to collect contractual cash flows and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2020, the entity changed the business model to collect only contractual cash flows. On December 31, 2021, the bonds are quoted at 115 and the market rate of interest is 10%. What is the carrying amount of the investment on December 31, 2021?