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How much is the purchase price of the bonds on January

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Question 1 - On January 1, 2018 Karen Company acquired a 4-year bond with a face value of Php 1,200,000 and a stated interest rate of 10% per year payable annually on December 31. The bonds were acquired to yield a 12% and is to be accounted as financial asset at amortized cost.

Required - Based on the above, answer the following:

1. How much is the purchase price of the bonds on January 1, 2018?

2. How much is the interest income for 2018?

Question 2 - On April 1, 2018, Karen Company acquired a 4-year bonds with a face value of Php 2,000,000 and with a stated interest rate of 10% per year payable annually on December 31. The bonds were acquired to yield a 12% interest and is to be accounted as financial asset at amortized cost.

Required - Based on the above, answer the following:

1. How much is the purchase price of bonds on April 1, 2018?

2. How much is the interest income for 2018?

Reference no: EM132862085

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