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On January 1, 2019, Peter Corporation purchased a debt instrument at its face value of P3,000,000. The term of the contract is 15 years with an annual coupon of 5%. On December 31, 2019, the fair value of the instrument decreases to P2,955,000. 12-month expected credit losses are P30,000. Based on the above data, determine the net amount to be recognized in 2019 profit or loss and the amount to be reported on the December 31, 2019 Statement of Financial Position if the debt instrument is classified as: a. FA@AC* b. FA@FVTOCI * c. FA@FVTPL* *amount to presented in profit or loss and SFP respectively

On January 1, 2019, Peter Corporation purchased a debt instrument at its face value of P3,000,000. The term of the contract is 15 years with an annual coupon of 5%. On December 31, 2019, the fair value of the instrument decreases to P2,955,000. 12-month expected credit losses are P30,000. Based on the above data, determine the net amount to be recognized in 2019 profit or loss and the amount to be reported on the December 31, 2019 Statement of Financial Position if the debt instrument is classified as: a. FA@AC* b. FA@FVTOCI * c. FA@FVTPL* *amount to presented in profit or loss and SFP respectively

FINANCIAL ACCOUNTING
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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On January 1, 2019, Peter Corporation purchased a debt instrument at its face value of P3,000,000. The term of the contract is 15 years with an annual coupon of 5%. On December 31, 2019, the fair value of the instrument decreases to P2,955,000. 12-month expected credit losses are P30,000.

Based on the above data, determine the net amount to be recognized in 2019 profit or loss and the amount to be reported on the December 31, 2019 Statement of Financial Position if the debt instrument is classified as:

a. FA@AC*

b. FA@FVTOCI *

c. FA@FVTPL*

*amount to presented in profit or loss and SFP respectively

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