How much should bell company report as debt investment

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On January 1, 2014, Bell Company purchased 4,000 of P1,000 face value, 10% bonds of Pepper Company for P4,270,600. The bonds will mature on January 1, 2015 pay interest semi-annually on January and July 1. Bonds effective interest rate is 8%. Bell Company measures its investment at amortized cost.

Problem 1. In its December 31, 2014 profit or loss, how much should Bell Company report as interest income on the bonds?

Problem 2. In its December 31, 2014 statement of financial position, how much should Bell Company report as debt investment?

Reference no: EM132936601

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