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On January 1, Year 1, Grow Company purchased P1,000,000 120 bonds of Glow Company for P1 ,063,394, a price that yields 10% Interest on these

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On January 1, Year 1, Grow Company purchased P1,000,000 120 bonds of Glow Company for P1 ,063,394, a price that yields 10% Interest on these bonds is payable every December 31. The bonds mature on December 31, Year maturing obligation, Grow sold P600,000 face value bonds at 101 plus accrued interest. Market value of the bonds on different dates is as follows: 3-3. 4. On April 1, Year 3, to pay a ' 108 106 104 December 31, Year1 December 31, Year 2 December 31, Year 3 REQUIRED: Assume that the company intended to collect the principal and (1) interest over the term of the bonds and did not choose the fair value option. a) At what amount should the bond investments be shown on December 31, Year 2 statement of financial What amount of gain or loss should Grow recognize on What amount of interest income will be taken to profit At what amount should the bond investments be position:? the sale of investments on April 1, Year 3? or loss for the year ended December 31, Year 3? (b) (c) (d) shown on December 31, Year 3 statement of financial Assume that the bonds were classified as debt investments at (a)How much is interest income for the year ended position? (2) fair value through profit or loss. December 31, Year 1? (b) What amount of gain or loss should Grow report on the sale of the bond investments on April 1, Year 3? At what amount should the bond investments be shown on December 31, Year 2 and December 31, Year 3 statement of financial position? (c) 3Assume that the bonds were designated as at fair value through other comprehensive income. (a) At what amount should the bond investments be shown on December 31, Year 2 statement of financial position? What amount of gain or loss should Grow recognize on the sale of investments on April 1, Year 3? What amount of interest income will be taken to profit or loss for the year ended December 31, Year 3? What cumulative amount of other comprehensive income shall be presented in the equity section of the (b) (c) (d) statement of financial position at December 31, Year 3

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