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How much is the interest income recognized

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On January 1, 20x1, Kevin Co. acquired 12%, P4,000,000 bonds for P4,198,948. The principal is due  on December 31, 20x3 but interest is made annually starting December 31, 20x1. The effective  interest rate on the bonds is 10%.

Problem 1: How much is the interest income recognized in 20x1?

a. 419,895     c. 407,273
b. 413,884     d. 480,000

Reference no: EM132784245

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