18.A.P 3,133,800B.P 3,276,900C.P3,344,093D.P 3,374,160 On January 2, 2012, Saul Company invested in a 10-year 10% debtinstrument with a face value of P 3,000,000 in which interest is to bereceived every Dec. 31. The debt instrument has an effective interestrate of 8% and was acquired to P 3,402,000. Saul Company has abusiness model of collecting all the contractual cash flows related to theinstrument.On December 31, 2015 the debt instrument has a prevailing market rateof 9%.The following are relevant present value factors:PV factors of 8% after 6 yearsPV factor of annuity of 8% after 6 years0.6304.623PV factor of 9% after 6 yearsPV factor of annuity of 9% after 6 years0.5964.486What amount should the debt investment be reported in theDecember 31,2015 statement of financial position?

Face value = P 3000000 Interest = 10% of Face value = P 300000 n = Remaining years = 6 r = 9% in…

Answered: On January 2, 2012, Saul Company…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

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Chapter13: Long-term Liabilities

Section: Chapter Questions

Problem 14MC: Whirlie Inc. issued $300,000 face value, 10% paid annually, 10-year bonds for $319,251 when the...

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