On January 1,Year 1 Abu Company acquired 5-year, 15%, P8,000,000 face value bonds for P8,274,646. Based...
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On January 1,Year 1 Abu Company acquired 5-year, 15%, P8,000,000 face value bonds for P8,274,646. Based on the company's business model and the contractual cash flow collectible from this instrument, Abu Company designates the bonds as bond investments at amortized cost. Interest on the bonds is payable annually on December 31. The investments were acquired at a price to yield 14%. (a) Prepare journal entries for Year 1 and Year 2, assuming the debt investment is classified as at FVPL. (b) Prepare journal entries for Year 1 and Year 2, assuming the debt investment is classified as at FVOCI. On January 1,Year 1 Abu Company acquired 5-year, 15%, P8,000,000 face value bonds for P8,274,646. Based on the company's business model and the contractual cash flow collectible from this instrument, Abu Company designates the bonds as bond investments at amortized cost. Interest on the bonds is payable annually on December 31. The investments were acquired at a price to yield 14%. (a) Prepare journal entries for Year 1 and Year 2, assuming the debt investment is classified as at FVPL. (b) Prepare journal entries for Year 1 and Year 2, assuming the debt investment is classified as at FVOCI.
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a Debt Investment Classified as Fair Value Through Profit or Loss FVPL Year 1 Acquisition of Bonds D... View the full answer
Related Book For
Financial Reporting Financial Statement Analysis and Valuation a strategic perspective
ISBN: 978-1337614689
9th edition
Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
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