Question
On January 1, 2021, Hannahs Publishing (Hannah) acquired Dani-HIIT Co.s (Dani) P4,000,000, 5-year 10% bond for P3,625,103.27. The ongoing interest rate for Danis bonds at
On January 1, 2021, Hannahs Publishing (Hannah) acquired Dani-HIIT Co.s (Dani) P4,000,000, 5-year 10% bond for P3,625,103.27. The ongoing interest rate for Danis bonds at that time was 12%
To successfully purchase Danis bonds, Hannah incurred a transaction cost of P200,000 (on top of the purchase price).
Hannah classifies Danis bond as a financial asset at fair value through other comprehensive income. The fair value of the bonds at the end of each year is as follows:
1. What is the carrying amount of Danis bond on December 31, 2021?
2. What is the carrying amount of Danis bond on December 31, 2022?
3. How much is Hannahs investment income for the year 2022?
4. How much is Hannahs cumulative unrealized gain/(loss) as of December 31, 2022?
5. How much is Hannahs unrealized gain/(loss) to be reported as Other Comprehensive Income for 2022?
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