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On January 1, 2019, Rio Company 3 points purchased 4,000 of P1,000 face value, 10% bonds of Flamingo Company for P4,270,600. The company has a business model of holding the financial asset to collect contractual cash flows and to sell the financial asset. The bonds will mature on January 1, 2023 pay interest semi annually on January 1 and July 1. Bonds effective interest rate is 8%. In its December 31, 2019 income statement, how much should Rio report as interest income on the bonds? 160,000 169,657 170,824 340,480

On January 1, 2019, Rio Company 3 points purchased 4,000 of P1,000 face value, 10% bonds of Flamingo Company for P4,270,600. The company has a business model of holding the financial asset to collect contractual cash flows and to sell the financial asset. The bonds will mature on January 1, 2023 pay interest semi annually on January 1 and July 1. Bonds effective interest rate is 8%. In its December 31, 2019 income statement, how much should Rio report as interest income on the bonds? 160,000 169,657 170,824 340,480

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, 2019, Rio Company 3 points purchased 4,000 of P1,000 face value, 10% bonds of Flamingo Company for P4,270,600. The company has a business model of holding the financial asset to collect contractual cash flows and to sell the financial asset. The bonds will mature on January 1, 2023 pay interest semi annually on January 1 and July 1. Bonds effective interest rate is 8%. In its December 31, 2019 income statement, how much should Rio report as interest income on the bonds?

160,000

169,657

170,824

340,480

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