On January 1, 2020, Blue Company purchased P500,000 8% bonds for P475,126 (including broker's commission of P20,000.) Interest is payable annually every December 31. The bonds mature on December 31, 2022. The prevailing parget rate for the bonds is 9% on December 31, 2020. Round off present value factors to four (4) decimal places and final answers to the nearest peso. If the investment is classified as financial asset at amortized cost determine the following The amount to be recognized in 2020 profit or loss. [ Select ] The amount to be reported on the entity's December 31, 2020 statement of financial position is?

On January 1, 2020, Blue Company purchased P500,000 8% bonds for P475,126 (including broker's commission of P20,000.) Interest is payable annually every December 31. The bonds mature on December 31, 2022. The prevailing parget rate for the bonds is 9% on December 31, 2020. Round off present value factors to four (4) decimal places and final answers to the nearest peso. If the investment is classified as financial asset at amortized cost determine the following The amount to be recognized in 2020 profit or loss. [ Select ] The amount to be reported on the entity's December 31, 2020 statement of financial position is?

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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Concept explainers

Debenture Valuation

A debenture is a private and long-term debt instrument issued by financial, non-financial institutions, governments, or corporations. A debenture is classified as a type of bond, where the instrument carries a fixed rate of interest, commonly known as the ‘coupon rate.’ Debentures are documented in an indenture, clearly specifying the type of debenture, the rate and method of interest computation, and maturity date.

Note Valuation

It is the process to determine the value or worth of an asset, liability, debt of the company. It can be determined by many processes or techniques. Many factors can impact the valuation of an asset, liability, or the company, like:

Question

100%

On January 1, 2020, Blue Company purchased P500,000 8% bonds for
P475,126 (including broker's commission of P20,000.) Interest is payable
annually every December 31. The bonds mature on December 31, 2022.
The prevailing parget rate for the bonds is 9% on December 31, 2020.
Round off present value factors to four (4) decimal places and final
answers to the nearest peso.
If the investment is classified as financial asset at amortized cost determine
the following
The amount to be recognized in 2020 profit or loss.
[ Select]
The amount to be reported on the entity's December 31, 2020 statement
of financial position is?

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