Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

On January 2, 2021, Santos Company invested in a 4-year, 10% bond with face value of P6,000,000 in which interest is to be paid every

image text in transcribed

On January 2, 2021, Santos Company invested in a 4-year, 10% bond with face value of P6,000,000 in which interest is to be paid every December 31. The bond has an effective interest rate of 9% and was acquired at prevailing rate of interest. On December 31, 2021, the bond has fair value of P6,229,862, which is based on prevailing rate of interest of 8.5%. Assume that on the date of acquisition the debt investment was designated as investment at FVTOCI but reclassified on January 1, 2022 due to changes in business model as investment at amortized cost, at what amount should the investment account be reported in December 31, 2022 financial statement

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Financial Accounting in an Economic Context

Authors: Jamie Pratt

10th edition

978-1119444367

Students also viewed these Accounting questions