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How much is unrealized gain or loss recognized in profit

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Reference no: EM133001616

On January 1, 2020, BTS Corporation purchased a 10%, P3,000,000 face value bonds to yield 12%. The bonds mature on January 1, 2030. The business model used by the company is to not to collect contractual cash flows.

The following information is available:

Date,                                 Quoted price in market,               Effective interest
December 31, 2020 -              none -                                       12%
December 31, 2021-                none-                                        10%
December 31, 2022-                P105-                                       none
December 31, 2023-                 112-                                         none

Problem 1: How much is the interest income recognized in 2021?

Problem 2: How much is the unrealized gain (loss) recognized in profit or loss in 2022?

Reference no: EM133001616

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