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On January 1, 2018, lab Co. acquired P4,000,000 of 12% face value bonds at P3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019 : 98 June 30, 2020 : 99 The carrying amount of investment on December 31, 2018 is   P3,719,620 P3,767,000 P3,814,380 P3,880,000 P4,000,000

On January 1, 2018, lab Co. acquired P4,000,000 of 12% face value bonds at P3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019 : 98 June 30, 2020 : 99 The carrying amount of investment on December 31, 2018 is   P3,719,620 P3,767,000 P3,814,380 P3,880,000 P4,000,000

FINANCIAL ACCOUNTING
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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On January 1, 2018, lab Co. acquired P4,000,000 of 12% face value bonds at P3,767,000 to be held financial assets at amortized cost with a 14% effective yield. Interest on bonds is payable annually on December 31 and bonds mature on January 1, 2022. The effective interest method of amortization is used. The quoted price of the bonds is as follows: December 31, 2018: 97 December 31, 2019 : 98 June 30, 2020 : 99 The carrying amount of investment on December 31, 2018 is

 

P3,719,620

P3,767,000

P3,814,380

P3,880,000

P4,000,000

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