On March 1, 2020, WHITE Corporation purchased bonds with face amount of P5,000,000. The entity paid P4,585,000 plus transaction cost of P157,000. The bonds mature on February 28, 2022 and pay 6% interest annually on February 28 of each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2020. The bonds are sold at 108 on June 30, 2021.
On March 1, 2020, WHITE Corporation purchased bonds with face amount of P5,000,000. The entity paid P4,585,000 plus transaction cost of P157,000. The bonds mature on February 28, 2022 and pay 6% interest annually on February 28 of each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2020. The bonds are sold at 108 on June 30, 2021.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Assuming the investment is appropriately recognized as financial assets at amortized cost: How much interest income is to be recognized on December 31, 2020?
![On March 1, 2020, WHITE Corporation purchased bonds with face amount of P5,000,000. The entity paid 94,585,000 plus transaction
cost of #157,000. The bonds mature on February 28, 2022 and pay 6% interest annually on February 28 of each year with 8% effective
yield. The bonds are quoted at 105 on December 31, 2020. The bonds are sold at 108 on June 30, 2021.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1173943f-8b9b-48a4-8eea-8fd93b9fad0f%2Fd4b15de4-6c2c-48c7-95ed-cd74c3b70901%2Fwbnfasn_processed.png&w=3840&q=75)
Transcribed Image Text:On March 1, 2020, WHITE Corporation purchased bonds with face amount of P5,000,000. The entity paid 94,585,000 plus transaction
cost of #157,000. The bonds mature on February 28, 2022 and pay 6% interest annually on February 28 of each year with 8% effective
yield. The bonds are quoted at 105 on December 31, 2020. The bonds are sold at 108 on June 30, 2021.
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