On January 1, 2018, an entity purchased bonds with face amount of P5,000,000. The entity paid P4,500,000 plus transaction cost of P168,600. The bonds mature on December 31, 2020 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 105 on December 31, 2018 and 110 on December 31, 2019.The business model in managing the financial asset is to collect contractual cash flows that are solely payments of principal and interest and also to sell the bonds in the open market. The entity has not elected the fair value option. On December 31, 2019, the entity changed its business model to collect only contractual cash flows. On December 31, 2020, the bonds are quoted at 115 and the market interest rate is 10%. find the following: 1. What amount of unrealized gain should be reported as component of OCI in the statement of comprehensive income for 2018? 2. What amount of unrealized gain should be reported as component of OCI in the statement of comprehensive income for 2019? 3. What amount of cumulative unrealized gain should be reported as component of OCI in the statement of changes in equity for 2019 4. What is the interest income for 2020? 5. What is the carrying amount of the investment on December 31, 2020
On January 1, 2018, an entity purchased bonds with face amount of P5,000,000. The entity paid P4,500,000 plus transaction cost of P168,600. The bonds mature on December 31, 2020 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds were quoted at 105 on December 31, 2018 and 110 on December 31, 2019.The business model in managing the financial asset is to collect contractual
find the following:
1. What amount of unrealized gain should be reported as component of OCI in the statement of comprehensive income for 2018?
2. What amount of unrealized gain should be reported as component of OCI in the statement of comprehensive income for 2019?
3. What amount of cumulative unrealized gain should be reported as component of OCI in the statement of changes in equity for 2019
4. What is the interest income for 2020?
5. What is the carrying amount of the investment on December 31, 2020
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