On January 1, 2021, Ape
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter13: Investments And Long-term Receivables
Section: Chapter Questions
Problem 1MC
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Question
![On January 1, 2021, Apollo Company acquired P4,000,000
of 12% face amount bonds for P3,767,000 to be held as
financial assets at amortized cost with a 14% effective
yield. Interest on bonds is payable annually on December
31 and the bonds mature on January 1, 2025. The
effective interest method of amortization is used.
What is the carrying amount of the bond investment on
December 31, 2021?
P3,719,620
O P3,767,000
O P4,000,000
P3,814,380](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe1a56b3d-f55a-4548-8b71-ce1d49cc950b%2F03e47ff2-2ad0-43bb-9b4c-1290eb6dcb31%2Fxmvhj8j_processed.jpeg&w=3840&q=75)
Transcribed Image Text:On January 1, 2021, Apollo Company acquired P4,000,000
of 12% face amount bonds for P3,767,000 to be held as
financial assets at amortized cost with a 14% effective
yield. Interest on bonds is payable annually on December
31 and the bonds mature on January 1, 2025. The
effective interest method of amortization is used.
What is the carrying amount of the bond investment on
December 31, 2021?
P3,719,620
O P3,767,000
O P4,000,000
P3,814,380
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