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How much is the gain on acquisition of treasury bonds

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Question - On January 1, 2019, Likable Company issued 12% bonds with face amount of P4,000,000 for P4,200,000. Interest is payable annually on December 31 and the bonds mature on January 1, 2024. On December 31, 2019, bonds with face amount of P1,000,000 were redeemed at 95. On July 1, 2020, the entity reacquired P3,000,000 face amount to be placed in the treasury at 103. On December 31, 2020, the treasury bonds are reissued at 98. Assume straight line method of amortization.

Required -

a) How much is the gain on acquisition of treasury bonds?

b) Compute the carrying value of bonds payable on December 31, 2021.

Reference no: EM132866994

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