1. What amount should be reported as interest income for 2022? 2. What amount of unrealized loss should be reported in the income statement for 2022? 3. What amount should be reported as interest income for 2023?
1. What amount should be reported as interest income for 2022? 2. What amount of unrealized loss should be reported in the income statement for 2022? 3. What amount should be reported as interest income for 2023?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Problem 21-6 (IFRS - From FVPL to FVOCI)
On January 1, 2022, Delta Company purchased 6% bonds
with face amount of P4,000,000.
The bonds mature on January 1, 2027 and were
for P3,530,000 to yield 9%.
The entity classified the bonds as held for trading and interest
is payable annually every December 31.
December 31, 2022
December 31, 2023
purchased
Fair value
3,490,000
3,425,000
Effective rate
10%
12%
On December 31, 2022, the entity changed the business model
to collect contractual cash flows and also to sell the bonds in
the open market.
On January 1, 2023, the fair value of the bonds did not change.
Required:
1. What amount should be reported as interest income for
2022?
2. What amount of unrealized loss should be reported in
the income statement for 2022?
3. What amount should be reported as interest income for
2023?
4. What amount of unrealized loss should be recognized in
other comprehensive income for 2023?
5. Prepare journal entries for 2022 and 2023.
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