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Lydio Company purchased P4,000,000 face value, 10%, 3-year Milo Co. bonds on January 1, 2021 when the prevailing market rate of interest was at 12%.
Lydio Company purchased P4,000,000 face value, 10%, 3-year Milo Co. bonds on January 1, 2021 when the prevailing market rate of interest was at 12%. Interests are collectible every December 31. Three-fourths of the Milo Co. bonds were sold on July 31, 2022 at a total proceeds of P3,500,000. Yield rate at December 31, 2021 and 2022, respectively were 8% and 14%. Assuming that the company's business model has an objective of holding the debt securities to collect contractual cash flows, what is the realized gain on sale of Milo Co. bonds
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