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How much are the interest income and carrying amount of the b

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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Question

On Jan 1 2021, ABC CO. acquired 100, P5,000 face amount 10%, 3 year term bonds of XYZ.Co for P428,567. ABC incurred transaction costs of P25,000. The effective interest rate is 14%. Bonds were quoted at 102 on Dec 31, 2022.

How much are the interest income and carrying amount of the bonds on Dec 31, 2022 if the bonds are held under FVOCI?

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