On January 1, 20x1, ABC Co. purchased ₱1,000,000 bonds at a price which reflects a yield rate of 14%. The bonds mature on January 1, 20x4 and pay 12% annual interest beginning January 1, 20x2. Transaction costs incurred on the acquisition amounted to ₱12,000. The bonds are classified as held for trading securities. On December 31, 20x1, the bonds are selling at a yield rate of 10%. How much is the unrealized gain (loss) on change in fair value recognized in ABC’s 20x1 profit or loss?
On January 1, 20x1, ABC Co. purchased ₱1,000,000 bonds at a price which reflects a yield rate of 14%. The bonds mature on January 1, 20x4 and pay 12% annual interest beginning January 1, 20x2. Transaction costs incurred on the acquisition amounted to ₱12,000. The bonds are classified as held for trading securities. On December 31, 20x1, the bonds are selling at a yield rate of 10%. How much is the unrealized gain (loss) on change in fair value recognized in ABC’s 20x1 profit or loss?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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On January 1, 20x1, ABC Co. purchased ₱1,000,000 bonds at a price which reflects a yield rate of
14%. The bonds mature on January 1, 20x4 and pay 12% annual interest beginning January 1, 20x2. Transaction costs incurred on the acquisition amounted to ₱12,000. The bonds are classified as held
for trading securities. On December 31, 20x1, the bonds are selling at a yield rate of 10%. How much
is the unrealized gain (loss) on change in fair value recognized in ABC’s 20x1 profit or loss?
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