On January 1, 2021, PHILIPPINE COMPANY acquired 5-year, 15%, $8,000,000 H-bonds. The investments were acquired at a price to yield 14%. Interest is payable annually on December 31 starting December 31, 2021. PHILIPPINES' business model is to hold the financial assets to collect contractual cash flows. QUESTION: a. Determine the initial measurement of H-bonds on January 1, 2021. b. Prepare a schedule of amortization using the effective interest method. Use the following columns: Date Interest Collection Interest Income Amortization Present Value c. Prepare all journal entries for 2021 and 2022 applicable to this transaction.

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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On January 1, 2021, PHILIPPINE COMPANY acquired 5-year, 15%, $8,000,000 H-bonds. The investments were acquired at a
price to yield 14%. Interest is payable annually on December 31 starting December 31, 2021. PHILIPPINES' business model is
to hold the financial assets to collect contractual cash flows.


QUESTION:
a. Determine the initial measurement of H-bonds on January 1, 2021.
b. Prepare a schedule of amortization using the effective interest method. Use the following columns:
Date
Interest
Collection
Interest
Income
Amortization
Present Value
c. Prepare all journal entries for 2021 and 2022 applicable to this transaction. 

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