On June 1, 2022, GHI Co. acquired P3,000,000 bonds of Z Company at 102 plus transaction costs of P150,000. The bonds will be accounted as a financial asset at fair value through profit or loss. The bonds pay interest of 11% every May 30 starting in 2023 and will mature on May 31, 2025. The fair value of the bonds (clean price) at year-end are presented below: December 31, 2022 December 31, 2023 December 31, 2024 99 103 98 What is the net effect on the income statement of the investment in bonds for 2022? (Indicate if increase or decrease) What is the carrying value of the investment in bonds on December 31, 2022? All of the bonds were sold at fair value on December 31, 2023. The total cash to be received from the sale of the investment is:
On June 1, 2022, GHI Co. acquired P3,000,000 bonds of Z Company at 102 plus transaction costs of P150,000. The bonds will be accounted as a financial asset at fair value through profit or loss. The bonds pay interest of 11% every May 30 starting in 2023 and will mature on May 31, 2025. The fair value of the bonds (clean price) at year-end are presented below: December 31, 2022 December 31, 2023 December 31, 2024 99 103 98 What is the net effect on the income statement of the investment in bonds for 2022? (Indicate if increase or decrease) What is the carrying value of the investment in bonds on December 31, 2022? All of the bonds were sold at fair value on December 31, 2023. The total cash to be received from the sale of the investment is:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Please answer the third question. Thanks
Transcribed Image Text:On June 1, 2022, GHI Co. acquired P3,000,000 bonds of Z Company at 102 plus transaction costs of
P150,000. The bonds will be accounted as a financial asset at fair value through profit or loss. The bonds
pay interest of 11% every May 30 starting in 2023 and will mature on May 31, 2025. The fair value of
the bonds (clean price) at year-end are presented below:
December 31, 2022
December 31, 2023
December 31, 2024
99
103
98
What is the net effect on the income statement of the investment in bonds for 2022? (Indicate if increase
or decrease)
What is the carrying value of the investment in bonds on December 31, 2022?
All of the bonds were sold at fair value on December 31, 2023. The total cash to be received from the
sale of the investment is:
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