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Determine the interest income recognized by corr on the bond

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Reference no: EM132957352

On january 1 2020 Corr Co purchased a P3,000,000, 12% 5 year bond. the bonds were aquired to yield 14% and pay interest annually. Corr purchased the bonds solely for the collection of the interest.

The fair value of the bonds at the end of each year from 2020 to 2022 is listed.

December 31, 2020           97

December 31, 2021           98

December 31, 2022           100

Problem 1. How much is the initial cost of the debt instrument?

Problem 2. Determine the interest income recognized by Corr on the bonds during each year from 2020 to 2022.

Problem 3. Prepare an amortization table to show the carrying amount of the bonds at the end of each year from 2020 to 2022.

Reference no: EM132957352

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