How much should the bond be initially valued

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On January 1, 2021, NCT Co. acquired a 10-year bond with a face value of P5,000,000 and stated rate of 10% per annum payable every January 1 of each year. The bonds were acquired at 105 plus transaction cost of P70,882.89. The effective interest rate was interpolated and determined to be at 9%. This investment was appropriately measured as financial asset at fair value through other comprehensive income. The bonds were quoted at 103 and 104 at the end of 2021 and 2022.

Problem 1: How much should the bond be initially valued?

Problem 2: How much is the unrealized gain (loss) presented in the statement of financial position as of December 31, 2022?

Reference no: EM132996105

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