On January 1, 2012, Sisterakas Corporation purchased P4,000,000 10% bonds for P3,711,520. Sisterakas plans to hold the investment in bonds to maturity. However, if the market interest rates fall sufficiently, Sisterakas will consider selling the investment in bonds to realize associated gain. The bonds were purchased to yield 12%. Interest is payable annually every December 31. The bond mature on December 31, 2016. On December 31, 2012 the bonds were selling at 99. On December 31, 2013, Sisterakas sold P2,000,000 face value bonds at 101, which is the fair value of the bonds on the date, plus accrued interest. Under PAS 39, the unrealized gain to be recognized as component of equity on 12/31/2012 is
On January 1, 2012, Sisterakas Corporation purchased P4,000,000 10% bonds for P3,711,520. Sisterakas plans to hold the investment in bonds to maturity. However, if the market interest rates fall sufficiently, Sisterakas will consider selling the investment in bonds to realize associated gain. The bonds were purchased to yield 12%. Interest is payable annually every December 31. The bond mature on December 31, 2016. On December 31, 2012 the bonds were selling at 99. On December 31, 2013, Sisterakas sold P2,000,000 face value bonds at 101, which is the fair value of the bonds on the date, plus accrued interest. Under PAS 39, the unrealized gain to be recognized as component of equity on 12/31/2012 is
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
On January 1, 2012, Sisterakas Corporation purchased P4,000,000 10% bonds for P3,711,520. Sisterakas plans to hold the investment in bonds to maturity. However, if the market interest rates fall sufficiently, Sisterakas will consider selling the investment in bonds to realize associated gain. The bonds were purchased to yield 12%. Interest is payable annually every December 31. The bond mature on December 31, 2016. On December 31, 2012 the bonds were selling at 99. On December 31, 2013, Sisterakas sold P2,000,000 face value bonds at 101, which is the fair value of the bonds on the date, plus accrued interest.
Under PAS 39, the unrealized gain to be recognized as component of equity on 12/31/2012 is
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education