On September 1, 2022, when the prevailing market rate on similar instruments was at 5%, ABC Corporation acquired P5,000,000 bonds from R Company. The bonds will be accounted as a financial asset at fair value through other comprehensive income. The bonds pay interest of 6% every March 1 and September 1 and will mature on September 1, 2027. The fair value of the bonds ( dirty price) at year end are presented below: Dec 31, 2022 107 Dec. 31,2023 105 Dec 31, 2024 103 Dec 31, 2025 104 Dec 31, 2026 101 a. what is the amount of adjustment to the unrealized gain or loss-other comprehensive income account to update the fair value of the investment on December 31, 2023? ( debit or credit?) b. prepare the journal entry to record the receipt of interest on march 1, 2024 c. what is the carrying value of the investment in bonds on december 31, 2024? d. If bonds with face value of P2,000,000 were sold at fair value on Decembe 31, 2025, ( after updating the related investment's fair value), what is the balance of unrealized gain or loss- other comprehensive income to be "recycled" to the income statement in 2025? ( debit or credit?)
On September 1, 2022, when the prevailing market rate on similar instruments was at 5%, ABC Corporation acquired P5,000,000 bonds from R Company. The bonds will be accounted as a financial asset at fair value through other comprehensive income. The bonds pay interest of 6% every March 1 and September 1 and will mature on September 1, 2027. The fair value of the
Dec 31, 2022 107
Dec. 31,2023 105
Dec 31, 2024 103
Dec 31, 2025 104
Dec 31, 2026 101
a. what is the amount of adjustment to the unrealized gain or loss-other comprehensive income account to update the fair value of the investment on December 31, 2023? ( debit or credit?)
b. prepare the
c. what is the carrying value of the investment in bonds on december 31, 2024?
d. If bonds with face value of P2,000,000 were sold at fair value on Decembe 31, 2025, ( after updating the related investment's fair value), what is the balance of unrealized gain or loss- other comprehensive income to be "recycled" to the income statement in 2025? ( debit or credit?)
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