On January 1, 20x1, Dagul Co. acquired 10%, P4,000,000 bonds for P3,807,853. The principal is due on January 1, 20x4 but interest is due annually starting December 31, 20x1. The yield rate on the bonds is 12%. On July, 1 20x1, Dagul Co. changed its business model. It was ascertained that the investment in bonds at amortized cost should be reclassified to held for trading securities on reclassification date. The bonds were quoted at 102, 103 and 104 on July 1, 20x1, December 31, 20x1 and January 1, 20x2, respectively. How much is the gain (loss) on reclassification on January 1, 20x2? O 295,205 O 243,676 O 255,205
On January 1, 20x1, Dagul Co. acquired 10%, P4,000,000 bonds for P3,807,853. The principal is due on January 1, 20x4 but interest is due annually starting December 31, 20x1. The yield rate on the bonds is 12%. On July, 1 20x1, Dagul Co. changed its business model. It was ascertained that the investment in bonds at amortized cost should be reclassified to held for trading securities on reclassification date. The bonds were quoted at 102, 103 and 104 on July 1, 20x1, December 31, 20x1 and January 1, 20x2, respectively. How much is the gain (loss) on reclassification on January 1, 20x2? O 295,205 O 243,676 O 255,205
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:On January 1, 20x1, Dagul Co. acquired 10%, P4,000,000 bonds for P3,807,853. The principal is due on January 1,
20x4 but interest is due annually starting December 31, 20x1. The yield rate on the bonds is 12%. On July, 1 20x1,
Dagul Co. changed its business model. It was ascertained that the investment in bonds at amortized cost should be
reclassified to held for trading securities on reclassification date. The bonds were quoted at 102, 103 and 104 on July
1, 20x1, December 31, 20x1 and January 1, 20x2, respectively.
How much is the gain (loss) on reclassification on January 1, 20x2?
O 295,205
O 243,676
O 255,205
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