On January 1, 2020, Wise Corporation purchased P3,500,000 10% bonds for P3,680,285 (including brokers commission of P70,000). Interest is payable annually every December 31. The bonds mature on December 31, 2022. The prevailing market rate for the bonds is 9% at December 31, 2020.

1. If the bonds are classified as trading securities, the amount to be recognized as fair value adjustment loss in its 2020 profit or loss is?

A. 48650

B. 21630

C. 91630

D. 118650

2. If the bonds are classified as amortized cost securities, the amount to be reported on the entitys December 31, 2020 statement of financial position is?

A. 3620190

B. 3561635

C. 3588655

D. 3624705

3. If the entity sold the investment on 31 December 2020 at fair value and bonds are classified as financial asset at FVTOCI, the entity will report a reclassification adjustment of?

A. 48650

B. 63074

C. (63074)

D. 0