Question
On January 1, 2020, Eddy Company purchased 12% bonds with face value amount of P5,000,000 for P5,380,000. The bonds provide an effective yield of 10%.
On January 1, 2020, Eddy Company purchased 12% bonds with face value amount of P5,000,000 for P5,380,000. The bonds provide an effective yield of 10%. The bonds are dated January 1, 2020, mature on January 1, 2025 and pay interest annually on December 31 of each year. The bonds are quoted at 120 on December 31, 2020. The entity has elected the fair value option for the bond investment.
What total income from bond investment should be reported in the profit or loss for 2020?
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Auditing And Assurance Services An Integrated Approach
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley
11th Edition
0131867121, 978-0131867123
