show complete solutions. This is a multiple choice question.

1. On January 1, 2019, Shine Company purchased a 5year bond with a face amount of P4,500,000 to yield 13%. Interest is to be paid every December 31 while the principal is to be repaid on maturity. The maturity date of the investment is on January 1, 2025. An active market is available so there is no problem to ascertain the fair value of the bonds. The stated rate of the bond is 9%. On December 31, 2019 the bond is trading at 12% for P4,013,355; on December 31, 2020 the bond is trading at 11.25% for P4,122, 140; on December 31, 2021 the bond is trading at 14% for P33211530; and on December 31, 2022 the bond is trading at 13.25% for P4,14E,390. Use four decimal places only. If the investment is accounted under Amortized Cost, at what amount should the investment be presented in the Statement of Financial Position on December 31, 2020? a. P5,200,28E- b. P336452? c. P3366333 d. P53333312 2. On January 1, 2019, Echo Co. acquired a 5~year bond investment with a Face 'v'alue of P5,000,000 for P55323029. The bonds carry an interest of 12% per year payable very December 31 and the bonds yield 10%. The company also incurred 30,000 transaction cost which was included in the total purchase price. The bonds are to be appropriately classified as held for trading. On December 31, 2019, the bonds are quoted at 104%. On November 1, 2020, the company changed business model. It was determined that the remaining investments should be reclassified at amortized cost. The bonds are quoted at 102% during this date. On December 31, 2020, the bonds are quoted at 103%. On January 1, 2021 the bonds are quoted at 103.5%. How much is the interest income in 2020?1 a. P531,693 b. P5 24,859 c. P 0 d. PEDD,DDD