Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 26 1.5 pts On April 1, 2021 Low Co. purchased a P200,000 at face value bond investment that will mature on April 1,

image text in transcribedimage text in transcribed

Question 26 1.5 pts On April 1, 2021 Low Co. purchased a P200,000 at face value bond investment that will mature on April 1, 2027. Interest on this bond is collectible every April 1 starting 2022, Low Co. account for this investment based on business model of collecting contractual cash flows and to sell when circumstances warrant. Low Co. paid other directly attributable cost of P10,160 to acquire the investment. The bond after transaction cost will yield 5% interest. Effective interest at the end of 2021, and 2023 were 3%, and 6%, respectively. While the investment is quoted at 105 on December 31, 2022. Low Co. reported interest income of P7,881 in 2021 related to this bond, amortization of P1,119 and cumulative balance in other comprehensive income of P19,707 at the end of 2021. How much is the correct interest income that Low Co. should report in its Statement of Comprehensive income for the period ending December 31, 2022?

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

Students also viewed these Accounting questions

Question

=+What kind of study is this?

Answered: 1 week ago