Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On January 1, 2021 Espresso Company bought a 4-year, 10%, bonds of Caf Incorporated. The bonds is collectible in equal annual installment of P1,000,000

On January 1, 2021 Espresso Company bought a 4-year, 10%, bonds of Café Incorporated. The bonds is collectible in equal annua

How much is the interest income reported in its statement of comprehensive income for the period ending December 31, 2023?  

On January 1, 2021 Espresso Company bought a 4-year, 10%, bonds of Caf Incorporated. The bonds is collectible in equal annual installment of P1,000,000 plus interest at the end of each year. At purchase date, Espresso recorded the debt investment at an amount lower by P160,442 compared to its face value. On December 31, 2022, Espresso recorded a debit to debt investment account of P48,037 representing amortization of debt investment during the year. At the end of 2024, upon full collection of the bonds, the company recorded a debit to debt investment of P17,857 representing amortization of the debt securities during the period. The bonds were quoted at the end of 2021, 2022, 2023, respectively at 103, 98 and 101. Assuming that the company's business model has an objective of collecting contractual cash flows and to sell the debt securities when circumstances warrant. How much is the interest income reported in its statement of comprehensive income for the period ending December 31, 2023?

Step by Step Solution

3.40 Rating (150 Votes )

There are 3 Steps involved in it

Step: 1

Answer Interest income reported in statement of comprehensive ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investments An Introduction

Authors: Herbert B Mayo

9th Edition

324561385, 978-0324561388

More Books

Students also viewed these Accounting questions

Question

How does the winner of a lawsuit enforce the judgment?

Answered: 1 week ago

Question

Journalize entries for accounts requir- ing adjustment. AppendixLO1

Answered: 1 week ago

Question

4. Pupils often misbehave in order to make the teacher look bad.

Answered: 1 week ago