PROBLEM 8On January 2, 2021, Santos Company invested in a 4 -year, 10% bond with facevalue of P6,000,000 in which interest is to be paid every December 31. The bond hasan effective interest rate of 9% and was acquired at prevailing rate of interest. OnDecember 31, 2021, the bond has fair value of P6,229,862, which is based onprevailing rate of interest of 8.5%.Assume that on the date of acquisition the debt investment was designated asinvestment at FVTOCI but reclassified on January 1, 2022 due to changes inbusiness model as investment at amortized cost, at what amount should theinvestment account be reported in December 31, 2022 financial statement?

Financial statements refer to the written form of a statement of a company that depicts its…

On January 2, 2021, Santos Company invested in a 4-year, 10% bond with face value of P6,000,000 in which interest is to be paid every December 31. The bond has an effective interest rate of 9% and was acquired at prevailing rate of interest. On December 31, 2021, the bond has fair value of P6,229,862, which is based on prevailing rate of interest of 8.5%.

On January 2, 2021, Santos Company invested in a 4-year, 10% bond with face value of P6,000,000 in which interest is to be paid every December 31. The bond has an effective interest rate of 9% and was acquired at prevailing rate of interest. On December 31, 2021, the bond has fair value of P6,229,862, which is based on prevailing rate of interest of 8.5%.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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