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Find the carrying amount of the investment in bond

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Reference no: EM132756900

On January 1, 2018, Karen Company purchased a serial bond with a face value of Php 3,000,000 at a cost of Php 3,102568. The stated interest of the bond is 12% and interest and principal are payable annually every December 31. The bonds are to be held with a 10% effective yield. The bonds mature at annual installment of Php 1,000,000 every year.

Required:

Problem 1: Based on the above, compute the following:

1. Interest income for 2018
2. Carrying amount of the investment in bond in December 31, 2018
3. Current portion of the bonds on December 31, 2018
4. Non-current portion of the bonds on December 31, 2018
5. Journal entries

Reference no: EM132756900

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