On January 1, 2021, ABC Co. acqulred P2,000,000 face amount, 10% bonds for P1,903,927. The bonds were measured at amortized cost. The principal Is due on January 1, 2024 but Interest payments are due annually every December 31. The effective interest rate is 12%. On December 31, 2022, the Investee entered Into a corporate rehabilitation program resulting In the extenslon of the maturity of the bonds to January 1, 2026. ABC sees this as a loss event. ABC estimates that only the face amount of the bonds will be collected, in lump-sum, on January 1, 2026. There Is no interest recelvable as of December 31, 2022. The current market rate on December 31, 2022 Is 14%. The carrying amount of the impalred financlal asset on December 31, 2022 Is* P1,423,560 O P2,000,000 O P1,964,286 O P1,932,398
On January 1, 2021, ABC Co. acqulred P2,000,000 face amount, 10% bonds for P1,903,927. The bonds were measured at amortized cost. The principal Is due on January 1, 2024 but Interest payments are due annually every December 31. The effective interest rate is 12%. On December 31, 2022, the Investee entered Into a corporate rehabilitation program resulting In the extenslon of the maturity of the bonds to January 1, 2026. ABC sees this as a loss event. ABC estimates that only the face amount of the bonds will be collected, in lump-sum, on January 1, 2026. There Is no interest recelvable as of December 31, 2022. The current market rate on December 31, 2022 Is 14%. The carrying amount of the impalred financlal asset on December 31, 2022 Is* P1,423,560 O P2,000,000 O P1,964,286 O P1,932,398
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 2021, ABC Co. acqulred P2,000,000 face amount, 10% bonds for
P1,903,927. The bonds were measured at amortized cost. The principal Is due on
January 1, 2024 but Interest payments are due annually every December 31. The
effective interest rate is 12%. On December 31, 2022, the Investee entered Into a
corporate rehabilitation program resulting In the extenslon of the maturity of the
bonds to January 1, 2026. ABC sees this as a loss event. ABC estimates that only
the face amount of the bonds will be collected, in lump-sum, on January 1, 2026.
There Is no interest recelvable as of December 31, 2022. The current market rate
on December 31, 2022 Is 14%. The carrying amount of the impalred financlal
asset on December 31, 2022 Is*
P1,423,560
O P2,000,000
O P1,964,286
O P1,932,398
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