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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.   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 c. P31,895 b. P29,010 d. P 0

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.   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 c. P31,895 b. P29,010 d. P 0

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, 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.
 
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 c. P31,895
b. P29,010 d. P 0 
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