Solution-How much is the interest income in its statement

How much is the interest income in its statement

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Reference no: EM133171472

Question - Lydio Company purchased P4,000,000 face value, 10%, 3-year Milo Co. bonds on January 1, 2021 when the prevailing market rate of interest was at 12%. Interests are collectible every December 31. Three-fourths of the Milo Co. bonds were sold on July 31, 2022 at a total proceeds of P3,500,000. Yield rate at December 31, 2021 and 2022, respectively were 8% and 14%.

Assuming that the company's business model has an objective of holding the debt securities to collect contractual cash flows and to sell, how much is the interest income in its statement of comprehensive income for the period ending December 31, 2022?

Assuming that the company's business model has no objective of holding the debt securities to collect contractual cash flows, the investment is reported in the statement of financial position as of December 31, 2022?

Reference no: EM133171472

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How much is the interest income in its statement

Reference no: EM133171472

Reference no: EM133171472

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