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On January 1, 2019, YOU TOO Corporation purchased P1,000,000 10% bonds classified as FA@AC. The bonds were purchased to yield 12%. Interest is payable annually every December 31. The bonds mature on December 31, 2023. On December 31, 2019 the bonds were selling at 99. On December 31, 2020, YOU TOO sold P500,000 face value bonds at 101. The bonds were selling at 103 on December 31, 2021.

On January 1, 2019, YOU TOO Corporation purchased P1,000,000 10% bonds classified as FA@AC. The bonds were purchased to yield 12%. Interest is payable annually every December 31. The bonds mature on December 31, 2023. On December 31, 2019 the bonds were selling at 99. On December 31, 2020, YOU TOO sold P500,000 face value bonds at 101. The bonds were selling at 103 on December 31, 2021.

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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ANSWER 24 AND 26 ONLY

On January 1, 2019, YOU TOO Corporation purchased P1,000,000 10% bonds classified as FA@AC. The bonds were purchased to yield 12%. Interest is payable annually every December 31. The bonds mature on December 31, 2023. On December 31, 2019 the bonds were selling at 99. On December 31, 2020, YOU TOO sold P500,000 face value bonds at 101. The bonds were selling at 103 on December 31, 2021. 23. How much is the gain on sale of the investment in bonds in 2020? a. P41,060 b. P29,010 c. P35,387 d. P10,000 24. If the entity reclassified the bonds as FA@FVTPL after the sale, how much should be recognized in profit or loss on reclassification date? a. P39,010 b. P29,010 c. P31,895 d. P 0
Transcribed Image Text:On January 1, 2019, YOU TOO Corporation purchased P1,000,000 10% bonds classified as FA@AC. The bonds were purchased to yield 12%. Interest is payable annually every December 31. The bonds mature on December 31, 2023. On December 31, 2019 the bonds were selling at 99. On December 31, 2020, YOU TOO sold P500,000 face value bonds at 101. The bonds were selling at 103 on December 31, 2021. 23. How much is the gain on sale of the investment in bonds in 2020? a. P41,060 b. P29,010 c. P35,387 d. P10,000 24. If the entity reclassified the bonds as FA@FVTPL after the sale, how much should be recognized in profit or loss on reclassification date? a. P39,010 b. P29,010 c. P31,895 d. P 0
If the entity reclassified the bonds as FA@FVTOCI after the sale, how much should be reported as separate component of equity at December 31, 2020? a. P39,010 b. Р29,010 c. P31,895 d. P 0 If the entity reclassified the bonds as FA@FVTOCI after the sale, how much should be reported as separate component of equity at December 31, 2021? а. Р39,010 b. P29,010 c. P31,895 d. P
Transcribed Image Text:If the entity reclassified the bonds as FA@FVTOCI after the sale, how much should be reported as separate component of equity at December 31, 2020? a. P39,010 b. Р29,010 c. P31,895 d. P 0 If the entity reclassified the bonds as FA@FVTOCI after the sale, how much should be reported as separate component of equity at December 31, 2021? а. Р39,010 b. P29,010 c. P31,895 d. P
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