Solve the following problems 1. Powerful Company purchased the following securities during 2020. All of which...

  

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Solve the following problems 1. Powerful Company purchased the following securities during 2020. All of which are classified as financial assets at fair value through profit or loss. April 1 100 of 10 pct P10,000 face value Peach Company bonds due April 1,2030. Interest is payable April 1 and Oct 1. The bonds were purchased at 101. July 1 Buttercup Corp 12 pct Bonds P150,000 FV dated March 1, 2020 purchased at face value plus accrued interest. Interest is payable annually on March 1, the bonds are due on March 1,2030. The fair values at December 31, 2020 are as follows: Peach Company bonds Buttercup Corp bonds 99% 102% Required: Give all entries during 2020 including adjusting entries at December 31,2020. Provide the carrying value of all securities as of December 31, 2020. 2. On January 1, Year 1 Naruto Compnay purchased P100,000 face value 5 year bond of Wolf Corp for P108,660, a price that yields 5pct on a stated interest rate of 7 pct. Interest is payable annually at Dec 31. The bond investment is measured at amortized cost. On Dec 31, Year 3 after paying the periodic interest, Naruto negotiated for a modification of interest from 7 pct to 4.5 pct for the remaining term of the bonds due to continuous decline in the market rate of interest. On this date, Naruto Company had an allowance for expected credit losses relating to this investment in the amount of P1,500 after previously applying Stages 1 and 2 of the ECL model. Required: Give all entries in the books of Naruto for Years 1 to 4 as a result of the foregoing. Solve the following problems 1. Powerful Company purchased the following securities during 2020. All of which are classified as financial assets at fair value through profit or loss. April 1 100 of 10 pct P10,000 face value Peach Company bonds due April 1,2030. Interest is payable April 1 and Oct 1. The bonds were purchased at 101. July 1 Buttercup Corp 12 pct Bonds P150,000 FV dated March 1, 2020 purchased at face value plus accrued interest. Interest is payable annually on March 1, the bonds are due on March 1,2030. The fair values at December 31, 2020 are as follows: Peach Company bonds Buttercup Corp bonds 99% 102% Required: Give all entries during 2020 including adjusting entries at December 31,2020. Provide the carrying value of all securities as of December 31, 2020. 2. On January 1, Year 1 Naruto Compnay purchased P100,000 face value 5 year bond of Wolf Corp for P108,660, a price that yields 5pct on a stated interest rate of 7 pct. Interest is payable annually at Dec 31. The bond investment is measured at amortized cost. On Dec 31, Year 3 after paying the periodic interest, Naruto negotiated for a modification of interest from 7 pct to 4.5 pct for the remaining term of the bonds due to continuous decline in the market rate of interest. On this date, Naruto Company had an allowance for expected credit losses relating to this investment in the amount of P1,500 after previously applying Stages 1 and 2 of the ECL model. Required: Give all entries in the books of Naruto for Years 1 to 4 as a result of the foregoing.

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