On January 1, 2021, Mirakulo 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 bond 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?
On January 1, 2021, Mirakulo 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 bond 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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
a.3,814,380
b.3,767,000
c.4,000,000
d.3,719,620
![On January 1, 2021, Mirakulo 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 bond 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?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F925dba2e-5496-4bec-824d-e314c61db5bd%2F59b5c0ef-8c9c-446e-8ee1-5a9e1a9d79c3%2Fyyw9rb_processed.png&w=3840&q=75)
Transcribed Image Text:On January 1, 2021, Mirakulo 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 bond 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?
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