Reference no: EM133013604
Question - On April 1, 2019, ACT 999 Company purchased P 2,000,000, 12% bonds of Beauty Company for P 1,750,374.82, a price that yields 15%. Interest on these bonds is payable every March 31. The bonds mature on March 31, 2026. At initial recognition, the investment is held in the business model of collecting contractual cash flows and selling the financial assets. On July 1, 2023, to pay a maturing obligation, ACT 999 sold all of the bonds at 106.5 plus accrued interest.
Quoted price of the bonds on different dates are as follows: December 31, 2019 - 105; December 31, 2020- 106; December 31, 2021- 105.5; December 31, 2022- 107; December 31, 2023- 107.5; December 31, 2024- 108 and December 31, 2025- 107.
How much is the gain or loss on sale of debt investment recognized on the date of sale?
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