On September 1, 2020, SMD Company borrowed P5,000,000, 10% interest-bearing note due in five years. On December 31, 2020, the fair value of the note is determined to be P4,350,000. The entity elected irrevocably the fair value option in measuring the note payable. What amount of gain/loss from change in fair value of the note payable should be reported for 2020? A. P1,250,000 gain B. P1,250,000 loss C. P650,000 gain D. P650,000 loss

On September 1, 2020, SMD Company borrowed P5,000,000, 10% interest-bearing note due in five years. On December 31, 2020, the fair value of the note is determined to be P4,350,000. The entity elected irrevocably the fair value option in measuring the note payable. What amount of gain/loss from change in fair value of the note payable should be reported for 2020? A. P1,250,000 gain B. P1,250,000 loss C. P650,000 gain D. P650,000 loss

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 3MC: On July 1, 2019, Aldrich Company purchased as an available-for-sale security 200,000 face value, 9%...

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