On May 1, 2019, LAG Co. purchased a short-term P2,000,000 face value, 9% debt instruments for P1,860,000 including the accrued interest and classified it as a trading security. The debt instruments mature on January 1, 2022, and pay interest semi-annually on January 1 and July 1. On December 31, 2019, the fair market value of the instruments is 98%. On March 2, 2020, LAG Co. sold the trading security for P1,980,000. 31. How much will be recognized as gain (loss) on sale of trading security on 2020 income statement? a. (P10,000) b. P20,000 c. P120,000 d. P150,000
On May 1, 2019, LAG Co. purchased a short-term P2,000,000 face value, 9% debt instruments for P1,860,000 including the accrued interest and classified it as a trading security. The debt instruments mature on January 1, 2022, and pay interest semi-annually on January 1 and July 1. On December 31, 2019, the fair market value of the instruments is 98%. On March 2, 2020, LAG Co. sold the trading security for P1,980,000. 31. How much will be recognized as gain (loss) on sale of trading security on 2020 income statement? a. (P10,000) b. P20,000 c. P120,000 d. P150,000
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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On May 1, 2019, LAG Co. purchased a short-term P2,000,000 face value, 9% debt instruments for P1,860,000 including the accrued interest and classified it as a trading security. The debt instruments mature on January 1, 2022, and pay interest semi-annually on January 1 and July 1. On December 31, 2019, the fair market value of the instruments is 98%. On March 2, 2020, LAG Co. sold the trading security for P1,980,000. 31. How much will be recognized as gain (loss) on sale of trading security on 2020 income statement?
a. (P10,000)
b. P20,000
c. P120,000
d. P150,000
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