On October 1, 2021, POGI company purchased 4000 of the P1000 face amount, 10% bonds of GANDA Company for P4,462,500 which included accrued interest of P200,000. The bonds which mature on January 1, 2028, pay interest semiannually on January 1 and July 1. The entity used the straight line method of amortization and approprietely recorded the bonds as financial asset at amortized cost. What is the carrying amount of the bonds on December 31, 2021?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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On October 1, 2021, POGI company purchased 4000 of the P1000 face amount, 10% bonds of GANDA Company for P4,462,500 which included accrued interest of P200,000. The bonds which mature on January 1, 2028, pay interest semiannually on January 1 and July 1. The entity used the straight line method of amortization and approprietely recorded the bonds as financial asset at amortized cost. What is the carrying amount of the bonds on December 31, 2021?

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