If the bonds are purchased on September 1, 2021 rather than January 2021 and the company still reports on a calendar basis, and the bonds are held for collection of contractual cash flow, what amount is the carrying value of investment in 2024?
Pedro Co purchased a bond investment in Juan Company. The following are the data pertaining to Pedro’s Investments in Debt Security.
|
Date of purchase: |
January 1, 2021 |
|
Purchase price: |
P4,200,000 |
|
Principal amount: |
P4,000,000 |
|
Cash interest: |
5% per annum, payable on December 31 |
|
Effective interest: |
3.8806% per annum |
|
Maturity date: |
December 31, 2025 |
|
Fair |
|
|
December 31, 2021 |
P4,894,000 |
|
December 31, 2022 |
P4,560,000 |
|
The bond was sold on December 31, 2022 at its fair value. |
|
If the bonds are purchased on September 1, 2021 rather than January 2021 and the company still reports on a calendar basis, and the bonds are held for collection of contractual
4,098,425
4,070,763
4,084,594
4,043,102
Step by step
Solved in 3 steps with 1 images
