On January 1, 2020, Lucas Company purchased P1,200,000, 14% bonds of Andres Company for P1,381,934, a price that yields 10%. Interest on these bonds is payable every December 31. The bonds mature on December 31, 2024. Market value of the bonds on different dates is as follows: December 31, 2020 112 December 31, 2021 108 December 31, 2022 105 Assume that the company intended to collect the principal and interest over the term of the bonds and did not choose the fair value option. At what amount should the bond investments be shown on December 31, 2020 statement of financial position? a. 1,352,128 b. 1,243,617 c. 1,283,275 d. 1,319,341
On January 1, 2020, Lucas Company purchased P1,200,000, 14% bonds of Andres Company for P1,381,934, a price that yields 10%. Interest on these bonds is payable every December 31. The bonds mature on December 31, 2024. Market value of the bonds on different dates is as follows: December 31, 2020 112 December 31, 2021 108 December 31, 2022 105 Assume that the company intended to collect the principal and interest over the term of the bonds and did not choose the fair value option. At what amount should the bond investments be shown on December 31, 2020 statement of financial position? a. 1,352,128 b. 1,243,617 c. 1,283,275 d. 1,319,341
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On January 1, 2020, Lucas Company purchased P1,200,000, 14% bonds of Andres Company for P1,381,934, a price that yields 10%. Interest on these bonds is payable every December 31. The bonds mature on December 31, 2024. Market
December 31, 2020 112
December 31, 2021 108
December 31, 2022 105
Assume that the company intended to collect the principal and interest over the term of the bonds and did not choose the fair value option. At what amount should the bond investments be shown on December 31, 2020 statement of financial position?
a. 1,352,128
b. 1,243,617
c. 1,283,275
d. 1,319,341
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