January 1, 2020, Blue Company purchased P500,000 8% bonds for P475,126 (including broker's commission of P20,000.) Interest is payable annually every December 31. The bonds mature on December 31, 2022. The prevailing parget rate for the bonds is 9% on December 31, 2020. Round off present value factors to four (4). decimal places and final answers to the nearest peso If the investment is classified as financial asset at fair value through profit or loss determine the amount to be recognized in 2020 profit or l
January 1, 2020, Blue Company purchased P500,000 8% bonds for P475,126 (including broker's commission of P20,000.) Interest is payable annually every December 31. The bonds mature on December 31, 2022. The prevailing parget rate for the bonds is 9% on December 31, 2020. Round off present value factors to four (4). decimal places and final answers to the nearest peso If the investment is classified as financial asset at fair value through profit or loss determine the amount to be recognized in 2020 profit or l
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Debenture Valuation
A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.
Note Valuation
It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:
Question
On January 1, 2020, Blue Company purchased P500,000 8% bonds for P475,126
(including broker's commission of P20,000.) Interest is payable annually every
December 31. The bonds mature on December 31, 2022. The prevailing parget rate
for the bonds is 9% on December 31, 2020. Round off present value factors to four (4).
decimal places and final answers to the nearest peso
If the investment is classified as financial asset at fair value through profit or loss
determine the amount to be recognized in 2020 profit or loss.
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