On June 1, 20x1, ABC Co acquired investment in bonds with detachable warrants forP1,950,000. The bonds have face amount of P2,000,000. Without the detachable warrants, thebonds are selling at P1,800,000. The warrants have fair value of P150,000. ABC Co businessmodel requires debts instruments to be measured at FVOCI and Equity instruments at fairvalue. Subsequently, warrants were sold for P120,000.Requirement:Prepare Journal Entries on June 1 and selling of warrants.

Journal entry: Journal entry is the book of original entry where first transactions are recorded in…

Answered: onds have face a at P1,800,000. TH ebts…

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onds have face a at P1,800,000. TH ebts instruments atly, warrants wer

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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On June 1, 20x1, ABC Co acquired investment in bonds with detachable warrants for
P1,950,000. The bonds have face amount of P2,000,000. Without the detachable warrants, the
bonds are selling at P1,800,000. The warrants have fair value of P150,000. ABC Co business
model requires debts instruments to be measured at FVOCI and Equity instruments at fair
value. Subsequently, warrants were sold for P120,000.
Requirement:
Prepare Journal Entries on June 1 and selling of warrants.

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