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How much is the gain in the disposal of bonds on january

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On April 1, 2014, SURE Inc. acquired bonds securities of PNB dated January 1, 2014. The bonds have face value of P1,000,000 payable at the end of its four-year term. Interest of 10% is payable every December 31. The effective interest rate of the bonds on January 1, 2014 is 15%. The objective of the business model of SURE Inc. is to hold assets in order to collect contractual cash flows from principal and interest. On January 1, 2016, SURE Inc. sold the PNB bonds for 110 less disposal cost of P150,000.

Problem 1: how much is the gain or (loss) in the disposal of bonds on January 1, 2016?

a. P64,161
b. P50,231
c. P31,286
d. 44,872

Reference no: EM132772506

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