On January 1, 20x1, Eduard Co. acquired 12%, P4,000,000 bonds for P4,198,948. The principal is due on December 31, 20x3 but interest is made annually starting December 31, 20x1. The effective interest rate on the bonds is 10%. 13. How much is the interest income recognized in 20x1? a. 419,895 b. 413,884 c. 407,273 d. 480,000 14. How much is the carrying amount of the investment on December 31, 20x1? a. 4,198,948 b. 4,138,843 c. 4,072,727 d. 4,000,000

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