Please answer NUMBERS 2 and 3 AND SHOW YOUR SOLUTION held for trading. On December 31, 2015, the bonds are quoted at 104%.On January 1, 2015, Virginia Co. acquired a 5-year bonds with a total face valveof P5,000,000 for P5,379,079. The bonds carry an interest of 12% per yrPROBLEM 15-6 Initial and Subsequent measurement, Derecognition cfinancial asset measured at amortized cost on reclassification date. 0payable every December 31. The bonds are to be appropriately classified ,On November 1, 2016, Virginia Co. changed its business model. It ·2018 and DeceReclassification of Trading Debt SecuritiesOn January 1, 2015, Virginia Co. acquiredandheld for trading. On December 31, 2015, the bonds are quoted at 10 lasOn January 3, 2016, the 2 of the bonds were sold at 105.determined that the remaining investment in bonds should hefinancial asset measured at amortizedDecember 31, 2016, the bonds are quoted at 102.reclassifiedcost on reclassification dat,On January 1, 2017, the bonds were quoted at 104.Questions:Based on the above data, answer the following:CASE NO. 1- Assume the above data:1. How much is the interest income for 2015?c. P600,000d. P645,489а.Nilb. P537,9082. How much is the unrealized gain (loss) in 2015 to be recognized in tprofit or loss?Nilc. P200,000d. P(379,079)а.b. P(179,079)How much is the realized gain (loss) on sale in 2016 to be recognized in eprofit or loss?Nilc. P(33,494)d. P(64,540)а.b. P25,0003.

An investment in the bonds of a company can be reported as held for trading securities, available…

held for trading. On December 31, 2015, the bonds are quoted at 104%. On November 1, 2016, Virginia Co. changed its business model. t w. On January 1, 2015, Virginia Co. acquired a 5-year bonds with a total facce valse of P5,000,000 for P5,379,079. The bonds carry an interest of 12% per yer PROBLEM 15-6 Initial and Subsequent measurement, Derecognition e payable every December 31. The bonds are to be appropriately classified financial asset measured at amortized cost on reclassification date. O. determined that the remaining investment in bonds should be reclassified to and Reclassification of Trading Debt Securities On January 3, 2016, the 2 of the bonds were sold at 105. December 31, 2016, the bonds are quoted at 102. On January 1, 2017, the bonds were quoted at 104. Questions: Based on the above data, answer the following: CASE NO. 1- Assume the above data: 1. How much is the interest income for 2015? c. P600,000 d. P645,489 а. Nil b. P537,908 2. How much is the unrealized gain (loss) in 2015 to be recognized in te profit or loss? Nil C. P200,000 d. P(379,079) a. b. P(179,079) 3. How much is the realized gain (loss) on sale in 2016 to be recognized in profit or loss? Nil c. P(33,494) d. P(64,540) а. A P25,000 b.

held for trading. On December 31, 2015, the bonds are quoted at 104%. On November 1, 2016, Virginia Co. changed its business model. t w. On January 1, 2015, Virginia Co. acquired a 5-year bonds with a total facce valse of P5,000,000 for P5,379,079. The bonds carry an interest of 12% per yer PROBLEM 15-6 Initial and Subsequent measurement, Derecognition e payable every December 31. The bonds are to be appropriately classified financial asset measured at amortized cost on reclassification date. O. determined that the remaining investment in bonds should be reclassified to and Reclassification of Trading Debt Securities On January 3, 2016, the 2 of the bonds were sold at 105. December 31, 2016, the bonds are quoted at 102. On January 1, 2017, the bonds were quoted at 104. Questions: Based on the above data, answer the following: CASE NO. 1- Assume the above data: 1. How much is the interest income for 2015? c. P600,000 d. P645,489 а. Nil b. P537,908 2. How much is the unrealized gain (loss) in 2015 to be recognized in te profit or loss? Nil C. P200,000 d. P(379,079) a. b. P(179,079) 3. How much is the realized gain (loss) on sale in 2016 to be recognized in profit or loss? Nil c. P(33,494) d. P(64,540) а. A P25,000 b.

Financial Accounting

14th Edition

ISBN:9781305088436

Author:Carl Warren, Jim Reeve, Jonathan Duchac

Publisher:Carl Warren, Jim Reeve, Jonathan Duchac

Chapter15: Investments And Fair Value Accounting

Section: Chapter Questions

Problem 5E

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On January 1, 2018, lab Co. acquired P4,000,000 of 12% face value bonds at P3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019 : 98 June 30, 2020 : 99 The carrying amount of investment on December 31, 2018 is P3,719,620 P3,767,000 P3,814,380 P3,880,000 P4,000,000
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