On January 1, Year 1, Narito Company purchased P100,000 face value 5-year bond of Wolf Corporation for P108.660, a price that yields 5% on a stated interest rate of 7%. Interest is payable annually at December 31. The bond investment is measured at amortized cost. On December 31, Year 3, after paying the periodic interest, Narito negotiated for a modification of interest from 7% to 4.5% for the remaining term of the bonds due to continuous decline in the market rate of interest. How much is the amount of impairment loss?

On January 1, Year 1, Narito Company purchased P100,000 face value 5-year bond of Wolf Corporation for P108.660, a price that yields 5% on a stated interest rate of 7%. Interest is payable annually at December 31. The bond investment is measured at amortized cost. On December 31, Year 3, after paying the periodic interest, Narito negotiated for a modification of interest from 7% to 4.5% for the remaining term of the bonds due to continuous decline in the market rate of interest. How much is the amount of impairment loss?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter13: Investments And Long-term Receivables

Section: Chapter Questions

Problem 1RE

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