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How much is the gain on sale of bonds

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On January 1, 2020, the BTS Company purchased P800,000 of 6% bonds for P883,874. The bonds are dated January 1, 2020, and the interest is payable every December 31. At the time the bonds were purchased the market interest rate was 4%. The bonds mature on December 31, 2025. BTS Company uses the effective interest method of amortization and classified as debt investment @ Amortized cost. The bonds were sold in January 1, 2021 at a total proceeds of P902,678.

Problem 1: How much is the gain (loss) on sale of bonds?

Reference no: EM133001489

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