Question: Old MathJax webview show solution For items 5 and 6, please refer to the following information: On January 1, 2021, ABC Company purchased 6% redeemable

Old MathJax webview

Old MathJax webview show solution For items 5 and 6, please refer

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For items 5 and 6, please refer to the following information: On January 1, 2021, ABC Company purchased 6% redeemable preference shares with aggregate par value of P1,000,000 for P850,000. Transaction costs amounted to P12,609. The preference shares can be presented to the issuer for redemption at any time beginning January 1, 2023. The investment is measured at amortized cost. ABC expects to hold the investment for the next 5 years. The effective interest rate is 3%. 5. Prepare the entry on December 31, 2025, assuming the investment is held up to December 31, 2025 and is redeemed at a premium of P100,000. (5 pts.) 6. Prepare the entry on December 31, 2023, assuming the investment is redeemed on December 31, 2023 at a premium of P200,000. (5 pts.)

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