On January 1, 2020, Morocco Company purchased 12% bonds with face amount of P5,000,000 for P5,500,000...

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On January 1, 2020, Morocco Company purchased 12% bonds with face amount of P5,000,000 for P5,500,000 including transaction cost of P100,000. The bonds provide an effective yield of 10%. The bonds are dated January 1, 2020 and pay interest annually on December 31 of each year. The bonds are quoted at 115 on December 31, 2020. The entity has irrevocably elected to use the fair value option. 40. What amount of gain from change in fair value should be reported for 2020? 41. What amount of interest income should be reported for 2020? 42. What is the carrying amount of the bond investment on December 31, 2020? 43. What total amount of income from the investment should be reported in the income statement for 2020? 57. On January 1, 2020, Mauritania Company purchased bonds with face amount of P2,500,000 to be held as financial assets at amortized cost. The entity paid P2,300,000 plus transaction cost of P71,000. The bonds mature on December 31, 2022 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2020. The bonds are sold at 110 on December 31, 2021. What is the gain on sale? 58. On January 1, 2020, Cape Verde Company purchased bonds with face amount of P8,000,000 for P7,602,000 including transaction cost of P402,000 to be held as financial assets at amortized cost. The bonds mature on December 31, 2022 and pay interest of 8% annually every December 31 with a 10% effective yield. What is the carrying amount of the bond investment on 12/31/2020? On January 1, 2020, Morocco Company purchased 12% bonds with face amount of P5,000,000 for P5,500,000 including transaction cost of P100,000. The bonds provide an effective yield of 10%. The bonds are dated January 1, 2020 and pay interest annually on December 31 of each year. The bonds are quoted at 115 on December 31, 2020. The entity has irrevocably elected to use the fair value option. 40. What amount of gain from change in fair value should be reported for 2020? 41. What amount of interest income should be reported for 2020? 42. What is the carrying amount of the bond investment on December 31, 2020? 43. What total amount of income from the investment should be reported in the income statement for 2020? 57. On January 1, 2020, Mauritania Company purchased bonds with face amount of P2,500,000 to be held as financial assets at amortized cost. The entity paid P2,300,000 plus transaction cost of P71,000. The bonds mature on December 31, 2022 and pay 6% interest annually on December 31 of each year with 8% effective yield. The bonds are quoted at 105 on December 31, 2020. The bonds are sold at 110 on December 31, 2021. What is the gain on sale? 58. On January 1, 2020, Cape Verde Company purchased bonds with face amount of P8,000,000 for P7,602,000 including transaction cost of P402,000 to be held as financial assets at amortized cost. The bonds mature on December 31, 2022 and pay interest of 8% annually every December 31 with a 10% effective yield. What is the carrying amount of the bond investment on 12/31/2020?

Answer rating: 100% (QA)

Sure I can help you with those questions 40 The gain from the change in fair value for 2020 would be the difference between the fair value of the bonds on December 31 2020 and their initial cost Since the bonds were purchased at a cost of P5500000 and were quoted at 115 on December 31 2020 the fair value of the bonds would be P5500000 115 P6325000 Therefore the gain from change in fair value for 2020 would be P6325000 P5500000 P825000 41 The interest income for 2020 would be calculated based on the effective yield of 10 and the face amount of the bonds The face amount of the bonds is P5000000 12 P600000 Therefore the interest income for 2020 would be P600000 10 P60000 42 The carrying amount of the bond ... View the full answer