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Compute what is the gain on the sale of the debt investment

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Problem 1: On June 1, 2016, Rain Company purchased debt investments at amortized cost, 8,000 of 1,000 face value, 8% bonds of Cath Company for P7,383,000. The bonds were purchased to yield 10% interest. Interest is payable semi-annually on December 1 and June 1. The bonds mature on June 1, 2021. Rain uses the effective interest method of amortization. On June 1, 2017, Rain sold the bonds for P7,850,000. This amount includes the appropriate accrued interest. What is the gain on the sale of the debt investment?

Reference no: EM132724872

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