On Jan. 1, 2021, an entity bought investment in bonds and classified it as an investment at amortized cost. It has a total face value of P5,000,000 and an acquisition cost of P5,088,700. It pays an interest rate of 6%, to be paid semiannually every June 30 and Dec. 31. It matures on Dec. 31, 2024. The acquisition resulted to an effective interest rate of 5.5%. On Dec. 31, 2021, the bonds have a total fair value of P5,010,000. what is the Investment in Bonds as of acquisition?
On Jan. 1, 2021, an entity bought investment in bonds and classified it as an investment at amortized cost. It has a total face value of P5,000,000 and an acquisition cost of P5,088,700. It pays an interest rate of 6%, to be paid semiannually every June 30 and Dec. 31. It matures on Dec. 31, 2024. The acquisition resulted to an effective interest rate of 5.5%. On Dec. 31, 2021, the bonds have a total fair value of P5,010,000. what is the Investment in Bonds as of acquisition?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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On Jan. 1, 2021, an entity bought investment in bonds and classified it as an investment at amortized cost. It has a total face value of P5,000,000 and an acquisition cost of P5,088,700. It pays an interest rate of 6%, to be paid semiannually every June 30 and Dec. 31. It matures on Dec. 31, 2024. The acquisition resulted to an effective interest rate of 5.5%. On Dec. 31, 2021, the bonds have a total fair value of P5,010,000.
what is the Investment in Bonds as of acquisition?
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