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Determine the net increase in profit

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Question - On January 1, 20X1, ABC acquired 5,000 of XYZ's bonds denominated at P1,000, 12% interest rate, 5 years, to be held for trading. The effective rate in the market at that time is 10%. On December 31, 20X1, the market value of the bonds is P5,154,940, at 11% effective yield rate. ABC changes its business model in managing this financial asset by collecting contractual cash flows representing principal and interest. On December 31, 20X2, determine the net increase in profit?

Reference no: EM132978052

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