On July 1, 2021, Darrell Company purchased as debt investments at fair value through profit or loss, P500,000 face value Sweeney Company’s 8% bonds for P468,301 to yield 10%. The bonds mature on July 1, 2025 and pay
On July 1, 2021, Darrell Company purchased as debt investments at fair value through profit or loss, P500,000 face value Sweeney Company’s 8% bonds for P468,301 to yield 10%. The bonds mature on July 1, 2025 and pay
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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On July 1, 2021, Darrell Company purchased as debt investments at fair value through profit or loss, P500,000 face value Sweeney Company’s 8% bonds for P468,301 to yield 10%. The bonds mature on July 1, 2025 and pay interest annually every July 1. On December 31, 2021, the bonds had a market value of P472,500. On October 31, 2022, Darrell sold half of the bonds for P250,000 plus accrued interest. The bonds fair value at the end of 2022 was P300,000.
1. How much is the realized gain (loss) on sale of bonds in 2022?
2. How much is the unrealized gain (loss) in profit or loss in 2022?
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