1. How much is the carrying amount of the investment on December 31, 20x2? a. 1,000,000 b. 1,036,364 c. 1,069,421 d. 1,044,312 2. Assume that half of the investment was sold on January 1, 20x2 for ₱480,000. Transaction costs incurred on the sale amounted to ₱15,000. How much is the gain (loss) on the sale?
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Use the following information for the next two questions:
On January 1, 20x1, ABC Co. acquired 14%, ₱1,000,000 bonds for ₱1,099,474. The principal is due on
December 31, 20x3 but interest is due annually starting December 31, 20x1. The effective interest rate on
the bonds is 10%. The bonds are classified as investment measured at amortized cost.
1. How much is the carrying amount of the investment on December 31, 20x2?
a. 1,000,000 b. 1,036,364 c. 1,069,421 d. 1,044,312
2. Assume that half of the investment was sold on January 1, 20x2 for ₱480,000. Transaction costs
incurred on the sale amounted to ₱15,000. How much is the gain (loss) on the sale?
a. (54,711) b. (39,711) c. 16,341 d. (69,711)
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