June 1, 2022, when the prevailing market rate on similar instruments was at 14%, ABC Company acquired P10,000,000 bonds of XYZ Corporation. The bonds will be accounted as a financial asset at amortized cost. The bonds pay interest of 12% every May 31 and will mature on May 31, 2027. On August 1, 2023, when the prevailing market rate on similar instruments was at 11%, the company acquired another P5,000,000 bonds of UVW Corporation. To be accounted also as a financial asset at amortized cost, the bonds pay interest of 13% every January 31 and July 31 and will mature on July 31, 2026. On May 31, 2025, after receipt of interest, half of the investment purchased on June 1, 2022 was sold at face value. What is the amount of interest receivable accrued on December 31, 2022?

June 1, 2022, when the prevailing market rate on similar instruments was at 14%, ABC Company acquired P10,000,000 bonds of XYZ Corporation. The bonds will be accounted as a financial asset at amortized cost. The bonds pay interest of 12% every May 31 and will mature on May 31, 2027. On August 1, 2023, when the prevailing market rate on similar instruments was at 11%, the company acquired another P5,000,000 bonds of UVW Corporation. To be accounted also as a financial asset at amortized cost, the bonds pay interest of 13% every January 31 and July 31 and will mature on July 31, 2026. On May 31, 2025, after receipt of interest, half of the investment purchased on June 1, 2022 was sold at face value. What is the amount of interest receivable accrued on December 31, 2022?

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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