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On July 1, 2020, Hero Company purchased P1,000,000 8% bonds for P866,000. Acquisition cost amounted to P40,000. The bonds were purchased to yield 10% interest.
| On July 1, 2020, Hero Company purchased P1,000,000 8% bonds for P866,000. Acquisition cost amounted to P40,000. The bonds were purchased to yield 10% interest. | |
| The bonds mature on January 1, 2026, and pay interest annually on January 1. Hero uses the effective interest method of amortization. | |
| On December 31, 2020, what carrying amount should be reported as investment in bonds? |
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Financial Accounting Theory
Authors: Craig Deegan
2nd Edition
0077126734, 978-0077126735
