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Compute the Initial amount of the investment

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Question - On January 1, 2026, ABC acquired the entire P4M issue of 12% serial bonds to be held as financial assets at amortized cost. Bonds of P1M mature at annual interval beginning December 31, 2026. Interest is payable annually on December 31. The bonds have 14% effective rate. There is no established purchase price of the bonds.

1. Compute the Initial amount of the investment?

2. Compute the Carrying value of the investment at the end of 2026.

3. Compute the Interest income for the year 2027.

4. Compute the Carrying value of the investment at the end of 2027.

Reference no: EM132957927

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