Question
On June 1, 2019, Leni Company acquired a 5-year, 10%, P1,000,000 face value bonds for P920,000. The company paid brokers fees amounting to P118,896. As
On June 1, 2019, Leni Company acquired a 5-year, 10%, P1,000,000 face value bonds for P920,000. The company paid brokers fees amounting to P118,896. As a result, yield rate on the bond was 9%. Interests are collectible annually every May 31. The bonds were selling at 120, 105, 98 as of December 31, 2019, December 31, 2020 and December 31, 2021, respectively. The company classified the investment as Fair Value through Profit or Loss.
How much is the interest income that should be recognized for the year ended December 31, 2020?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Survey of Accounting
Authors: Thomas P. Edmonds, Frances M. McNair, Philip R. Olds, Bor Yi
3rd Edition
978-1259683794, 77490835, 1259683796, 9780077490836, 978-0078110856
